Microsoft and Lionhead previously worked together on Xbox title Fable, which has sold over two million units to date between the original game and the updated Fable: The Lost Chapters, making it into the best-selling role-playing franchise on the Xbox platform.

"We could not be more excited about being part of MGS," Lionhead boss Peter Molyneux commented in a statement today. "They have long supported our creative vision, and this teamwork resulted in the hugely successful 'Fable' franchise."

"This acquisition gives Lionhead the stability and opportunity to focus on creating world-class next generation titles," he continued. "We are joining some of the most incredible studios in the industry, the combined talent of which will truly take next generation gaming to a new level."