Lionhead regrouping

Barely two months into 2006, it's already shaping up to be an eventful year for Peter Molyneux's Lionhead Studios. Rumors surfaced in February that the development house was the subject of a heated bidding war between Ubisoft and Microsoft. At the same time, publisher Activision announced the cancellation of Lionhead's console versions of its PC game The Movies, citing disappointing sales of the game on its native platform as the reason. Now a Movies fan site is reporting that the developer is downsizing its operations and ending support for The Movies.

"We understand that Lionhead have had a company meeting today, where the decision was taken to downsize the company from three studios to just the two, which means the loss of approx 100 people," reads a news post on The Movies Planet.

An administrator on Lionhead's official forums gave the following response:

"Over the last few months Lionhead has been working on plans for a new AAA world class game. As work on a number of its titles draws to a close, a pool of 100 super talented developers at Lionhead are available to create a new super team at Lionhead. This will be in addition to an existing team which is working on an amazing next generation title. This strategy was presented to Lionhead this morning in a company meeting but sadly it will mean some redundancies.

"We are still continuing our support of the Movies, with new downloads on the Propshop, an add-on disk in summer, and the announcement of the winner of the Chrysler competition at E3."

Lionhead posted a news story on its Web site Tuesday advertising that the developer was now hiring, but as of press time, the developer's jobs page lists no current openings.

[UPDATE]: Trade site gamesindustry.biz reports confirmation from Lionhead that the developer has laid off 50 staffers from its Surrey studios, bringing the company's total headcount down to 200. The site also says Molyneux informed his staff that only two titles would continue on in development at Lionhead.