"When we were brainstorming what to do next in Fable, there was always a, 'Maybe we should go and do the MMO route?'," Molyneux said. "There were theories about how you would level up and class up and what the classes would be and so on, but we never got out of the brainstorming segment of that."

Molyneux explained that a Fable MMO could work "quite well" if the "charm" of the series--that being the world of Albion and its humor--were kept intact.

"I can see that that would work. The thing about Fable is that it was such a rich world. It was, well, what the name says it is. It#146;s all about Fable and Albion and this idea of legends and humour. RPGs are great for MMO transitions," Molyneux said.

"I can see that that concept works, and works quite well. I think the charm of Fable was in the feeling of the world and definitely the humour," he added. "If they keep that in an MMO, then there#146;s no reason why it shouldn#146;t do reasonably well, I don't think."

Lionhead Studios to create independent studio 22 Cans.

Needham was formerly the CEO of Marvel Heroes developer Gazillion Entertainment, and before that City of Heroes maker Cryptic Studios. He's also been chief financial officer at Sony Online Entertainment.

Lionhead Studios' most recent title was the Kinect-exclusive .

Late last month, the company posted a for a senior services engineer, who should have a "passion for playing online/multiplayer/MMO games."

Microsoft will during a intimate event in Redmond, Washington on May 21.