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Microsoft lifts the lid on Lift London, as studio moves away from packaged goods

Microsoft announced today Lift London, a new London-based game studio that aims to create new IP for tablets, mobile platforms and TVs.

During this announcement, Microsoft Studios executive Phil Harrison explained Microsoft is currently working to increase its focus on "connected entertainment services" while slowly shifting away from its role as a maker of packaged products.

Lift London, which was formed by Harrison, is described as a "21st-century studio" that will create titles only for the cloud. The new studio is led by former Rare developer Lee Schuneman, whose long career in games development is exemplified by titles ranging from Diddy Kong Racing to Viva Pinata and Kinect Sports. The developer joins Rare, Lionhead Studios, Soho Productions and the Copenhagen-based Press Play as part of Microsoft's European roster of studios.

The traditional games model is changing

The studio already has a hefty team backing it, including the newly hired Simon Carter the man who co-founded Fable developer Big Blue Box. According to Schuneman, the team will use a more "nimble" development cycle to turn out new titles, explaining that the traditional model for game releases is changing.

"Phil's view, one I support, is that the traditional game release model which has a massive up-front design, development and marketing cost and a relatively short 16-week window after the game comes out for returns is changing," he said. "Of course, we're still going to see the blockbuster games, the Halos, the Call of Dutys. They're not going to disappear anytime soon. But for the larger networked majority of gamers we plan to use a much more nimble, streamlined development cycle.

"The studio's mission is to be bold and brave and to lift the reach of the Xbox service beyond the console. If you look at the size of the tablet market today, it's measured in the hundreds of millions, and that's the area where we aspire to be."

Lift London will also be home to studio-in-residence Dlala Studios, an indie developer that is currently working on a new IP within the Lift London office in Soho Productions' London-based studio. Harrison describes Lift London's relationship with the indie developer as an "incubator," stating that the Lift team will offer guidance to the small indie crew.

Lionhead Studios gets a new head honcho

Microsoft has, in addition, announced that the U.K. based Fable developer Lionhead Studios is now headed by former Rare chief Scott Henson. According to Harrison, Lionhead co-founder Mark Webley has moved on "very amicably" from the studio he helped create with Peter Molyneux. "He felt it was time to seek alternative challenges," says Harrison.

With Henson's exit from Rare, Craig Duncan now takes the reins of the studio. This is the first formal announcement of his new role despite having headed the company for the past nine months. Duncan previously worked at Midway, Codemasters and Sumo Digital. In addition, Brian Stone is head of Soho Productions, best known for Kinect Sesame Street TV. The studio focuses on television-centric titles for Xbox.

Harrison adds that Microsoft is increasing its focus on the creation of connected services for gamers, marked by Lift London's cloud-centric distribution philosophy.

"That is the thread you will see us develop over the coming years," said Harrison. "It's not a change we're going to make immediately. We will continue to support retail products with our key releases for sure.

"That's the key strategic shift we're making with our business, moving from being a maker of packaged products to being an operator of connected services."

"But everything we do will have increasingly deep social and additional features that are reliant on the network, that are unlocked by the network and enhanced by the network through Xbox Live and beyond. That's the key strategic shift we're making with our business, moving from being a maker of packaged products to being an operator of connected services. You will see that in the people we hire, the companies we partner with and the business models we develop and the creative expression we bring to life on all of these platforms."

According to Harrison, the company will not use Valve as a benchmark for their success, however. "I admire Valve as a company and what they've achieved with Steam," he said in response to whether Microsoft would feel satisfied if it echoed the success of Steam with its own cloud gaming endeavor.

"So I wouldn't in any way criticize what they've achieved and the role they've played in the industry. But I'm not sure we would choose Steam as a benchmark of success. We would always seek to innovate and push beyond. Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

He later clarified that there are no plans to move away from disks entirely, stating that purchasing a product from retail on disk is a "great starting point."

"By and large what you get on that disc is the extent of the product. What I would encourage you to think is that the disc is the start of a five-year relationship with the gamer, we will try to refine and extend the product over many years. It is not mutually exclusive. We don't have to stop doing disc products to be cloud-centric."