After several years in development, Xbox One and Windows 10 game Fable Legends has been scrapped by Microsoft. Developer Lionhead Studios is to close.

Microsoft is in talks with Lionhead's staff to see if they can be placed elsewhere within the corporation or to find them opportunities in third-party studios.

Danish developer Press Play Studios is also being shut down, with its game, Project Knoxville, another to feel the axe. 

"These changes are taking effect as Microsoft Studios continues to focus its investment and development on the games and franchises that fans find most exciting and want to play," said Hanno Lemke, general manager of Microsoft Studios Europe.

Fable Legends was first publicly announced during Gamescom 2013 where it was planned to be a big Microsoft exclusive full release for the Xbox One, but the decision was made at the beginning of last year to offer the initial download version for free with paid premium content available later.

Now it won't be released at all.

Its gameplay centred on four online players who were going to be able take control of different heroes and an overall villain who would act as a "dungeon master" if you like, throwing monsters and traps at the other players in order to kill them off.

It was always going to be a hard sell, but the most worrying aspect was that each time a release window was discussed, the final game failed to materialise. Now we know why.

"Despite this news, we remain committed to the development communities in the UK and Europe, and Xbox will continue to support new IP and originality in the games we offer on our platforms, whether they’re AAA blockbusters like Quantum Break from Remedy, adventurous new IPs like Sea of Thieves from Rare, or unique new creations from independent developers like Moon Studios with Ori and the Blind Forest," added Lemke.

READ: Quantum Break preview: It's about time

Lionhead Studios was formed 20 years ago by Peter Molyneux and is responsible for the entire Fable RPG series and PC games including Black & White and The Movies. It was acquired by Microsoft in 2006.