"It is with mixed emotions that I made the decision to leave Microsoft and Lionhead Studios, the company that I co-founded in 1997, at the conclusion of development of Fable: The Journey," Molyneux said in a statement issued to Eurogamer by Microsoft.
"I remain extremely passionate and proud of the people, products and experiences that we created, from Black & White to Fable to our pioneering work with Milo and Kate for the Kinect platform.
"However, I felt the time was right to pursue a new independent venture. I'd like to thank the team at Lionhead, as well as our partners at Microsoft Studios for their support, dedication and incredible work over the years."
Molyneux has joined a new Guildford-based company called 22 Cans, a venture he described on Twitter as "something really amazing, scary and brave".
22 Cans was founded by former Lionhead chief technical officer Tim Rance, who left the studio in January.
This is probably good news overall,because Lionhead were slowly becoming like RARE under Microsoft..it will be interesting the direction Lionhead now take,with them having a few key people leaving now,probably even more like RARE
It is still a strange decision to announce this just a day or two after the announcement of Fable Heroes,was Pete not happy with having to make another Fable game?
peter molyneux @pmolyneux
Today is 7th day of 3rd month of 12th year. Add them all up and you get 22. 22cans