Microsoft Game Studios has just set up a branch in Reading to deal with publishing in Europe - that happens to include Lionhead! It’s headed by Phil Spencer, who’s currently general manager at MGS. Changes to what comes out of Lionhead and what we see do not seem likely, although this is probably of internal significance. Redmond, Microsoft’s HQ in Seattle on the American West Coast, is rather far away and the time difference caused some sleepless nights.

One of Microsoft’s chief bods, Chris Satchell, claims that the development studios are ecstatic that their bosses and moving closer.

We’ve had great feedback on this already - developers absolutely love the idea of having Microsoft people on the ground who can come to see them.

Here’s the press release, via Games Press:

UK-based European office will continue success for MGS in Europe

HELSINKI 4th May 2007 – Microsoft® today announced it will be establishing a European office of Microsoft Game Studios (MGS). The European arm will focus on continuing and growing the success of MGS-published content in Europe and in building ever-deeper relationships with European development talent.

From 6th May, the European arm of MGS will be based in Reading, UK and headed up by Phil Spencer, General Manager, Microsoft Game Studios. Reporting to Shane Kim, Corporate Vice President, Microsoft Game Studios, Spencer will continue his role of running the MGS publishing business and working with studios from around the world, while building a European publishing team alongside Shannon Loftis (Director of European Production) and Todd Stevens (Director of Business Management). The European Publishing team will report into the worldwide publishing leadership team in Redmond, WA.

“Europe is obviously very important to our platform efforts and an area where have a strong history of working with some of the best game industry talent,” said Spencer.

“We already have an established presence in the region with some of the world’s best development talent like Lionhead and Rare, and great publishing partners like Bizarre Creations, Real Time Worlds and Remedy. I’m very excited about what we’ve accomplished in Europe and I look forward to continuing and strengthening that success by building deeper relationships with the development community here.”