Liverpool made wipeout. Holy crap it's psygnosis the best f1 games. Etc. People have sweetie thinking. Lionhead made Fable 3 tgat was universally seen as a let down after Fable 2. Then they were working on this. Like I've said it is sad news but the content from a lot of people in this thread is embarassing to read
Lets have an accurate accounting here.
1. Sony closed Liverpool because WipEout had been relegated to a digital distro title and barely that (which makes me incredibly sad to type), Liverpool was in the same metro area as Evolution Studios (Liverpool v. Runcorn) and the new head of SCE UK was from Evo and was working out of Runcorn. They closed Liverpool and moved some of the staff to Evo. Liverpool hadn't delivered a major retail success since the PS1 when WipEout was still relevant. For the entirety of the PS2, PSP, PS3, and early into the PS Vita Sony kept trying to find new niches for Liverpool to fill. Ultimately it didn't work out, in part because another studio was 20 minutes across town, so why pay for two offices? Sony never overtly meddled and gave ample opportunity to find a financially sound footing for the independent studio which never materialized. Evo meanwhile had done so with the MotorStorm franchise and looked like the safer bet in the Liverpool metro area. Choice was made for them.
2. Microsoft bought Lionhead shortly into the first Xbox's lifespan. Fable 1 was already well on it's way as an exclusive title. The purchase included Big Blue Box, the small satellite of Lionhead that started the concept of Fable up in the first place. So they got Fable out and immediately started on Fable 2 for the next platform, Xbox 360. It did pretty well despite some quality issues. Then Fable 3, again did pretty well despite some quality issues. At that point MS had introduced Kinect and it looked like an early breakout for the X360, so suddenly Lionhead were making some Kinect games instead of working on Fable 4 for the Xbox One like their money making schedule would otherwise require of them. A short while later a large amount of the founding core of Lionhead, including Peter Molyneux and the ex-Bullfrog staff who started Big Blue Box left. A layoff follows shortly thereafter. A few months after that we hear about Fable Legends, a cross platform F2P take on the Fable universe.
Sony spent about a decade trying to find a viable niche for Liverpool making what they were great at making. Unfortunately gamer tastes have changed and futuristic racers are no longer big sellers, or even moderate sellers.
Microsoft took a studio with a proven, bankable IP, required that they make gameplay experiences that fit the MS Games Studios agenda (at the time Kinect), pushed MS corporate culture onto the studios, those two facets of management combined to push out a huge portion of the talent, so instead of trying to get back to the core of what Lionhead had been able to produce they instead make yet another shift chasing another popular blue ocean market (F2P MOBA/beat 'em up types).
If MS had simply kept Lionhead at arm's length and asked them to 1. keep making good Fables games that served the sizable core audience Fable had following 1 and 2 and 2. if another cool idea pops up along the way do up a prototype and let management know there would probably still be an open Lionhead Studios and we'd probably have just gotten Fable 4 this past holiday season.
MS just doesn't get it. The examples are as plentiful as fish in the sea. My personal favorite example at the moment is how MS pushed all their big first party and purchased exclusives with any real marketing penetration into the holiday 2015 window. The big fish did ok but titles like Tomb Raider got gobbled up by the cross platform, heavily advertised, heavily talked about 3rd party juggernauts that take the holiday season every year like clockwork.
Meanwhile Sony is off-schedule releasing their big titles in the spring, summer, and early fall. They're making bank on that strategy (see sales for The Last of Us and Bloodborne for examples) while keeping the calendar full and gamers sated. And this is why (among other things) Sony kicks their ass in hardware sales 10 months out of the year.