http://www.eurogamer.net/articles/2016-05-12-lionhead-the-inside-story 
MAD
The upshot was that Lionhead found itself in a financially precarious position. It had an astronomical burn rate - that is, it was ploughing through over $1m a month just to meet its gargantuan wage bill. The money was running out, and Peter had had enough of business matters. He wanted to get stuck into game development again.
Meanwhile, key Black & White developers left to form a new studio. Mark Healey (who in his spare time had worked on Rag Doll Kung-fu, the first non-Valve game to be sold on Steam), Alex Evans, David Smith and Kareem Ettouney founded Media Molecule and went on to create LittleBigPlanet for Sony.
Their departure felt like the end of an era, but to some it didn't come as a surprise. "They had a room out the back where they had them not working on any of the major games," Andy Robson says.
In 2002 Microsoft paid $375m for Rare. Sources familiar with the Lionhead deal say Microsoft snapped up the studio for "a song". One source says it went for under $20m. "It was tens of millions of pounds," is all Peter Molyneux will say.
"They sold it for peanuts. They sold it to save it. They were burning money.
"I missed my kids growing up because I was in that office the whole time, not because I was doing it for the money, but for the passion of making games. They forgot all that shit."
"The marketing was shit," he says. "It was terrible. They just didn't get it. But it wasn't Microsoft's marketing. Marketing was like its own department. And they were going, what are you making? An RPG? Right, dragons and shit. And that was their advert. And we were like, no, ours is a Monty Python-esque comedy. And they went, look, we know how to market RPGs. And they opened the RPG marketing drawer and pulled out a picture of a dragon that wasn't even in the game and went there you go. That's your market. The market for that game is your average Dungeons & Dragons fare. And we were like, this game's totally different.
"That annoyed me."
McCormack was further incensed over a row over the box art for Fable 2.
"They were going, you can't have a black person on the cover, and you can't have a woman. And you want a black woman. And I was like, yes, I do, because it's about be whatever hero you want. No. It's a white guy. That's just the way it is. We know what sells and that's fucking it. Stop the arguing. I was like, fuck you! That was a huge fight.
"They said, what's the most unsuccessful Disney film? I was like, I don't know. They went, Princess and the Frog. Work it out. I was like fuck you, man. I hated it.
"I was screaming at them in conference calls. I lost it at that point, because they just weren't getting the game. Especially because we were the first ever game that had gay marriage, we were about breaking down walls. It was meant to be funny and mature. They just took none of it and just did the usual white guy with a sword on the front. Damn it! You missed the point!"
At E3 2003, Peter Molyneux did a press interview about Fable. In it he announced multiplayer for the game. Developers back at Guildford watched in horror. No-one had heard anything about multiplayer. One engineer, we were told, was close to tears. When Molyneux returned, he faced the full wrath of a stressed and exhausted development team. The Carters raised their flame shields. Don't worry, they said. We'll work it out.
Molyneux has a reputation for causing all sorts of problems for those who work for him. If he's not announcing a new feature for a game due out in a few months, he's tearing up already completed work. There are many examples of this throughout Lionhead's life. They are not pretty.
According to three separate sources familiar with Lionhead's relationship with Microsoft in 2012, Xbox executives insisted the studio make a new Fable in the games as a service mould. A single-player focused role-playing game would not be allowed, Lionhead was told. "There's no way anybody's going to be making single-player boxed products any more," sources say Microsoft executives told Lionhead. "I want something that's games as a service."
"You make a service game or you get closed down," was how another source with knowledge of the conversations remembers them. "It was the new big push from Microsoft and I heard that all first party studios got a similar message, however some had more of a push back against it."
Developer
