Microsoft has announced that it has acquired game developer Lionhead Studios. The company was behind the popular "Fable" role-playing game, and may aid Microsoft in getting a bigger share of the Japanese market for games, where RPGs are big.

Lionhead will develop games exclusively for the Xbox 360 and Microsoft's Windows desktop operating system. The studio's founder Peter Molyneux said the deal will give Lionhead "the stability and opportunity to focus on creating world-class next-generation titles." Financial terms of the acquisition were not disclosed.