According to their report, Microsoft has the Forza Horizon 3 developer tasked with making a new Fable game.
The report says that the new Fable will be a "character-focused, open-world action RPG".
Creating a new office comes with its own set of challenges and the team are staffing up and getting everything in line, with no timeframe on when the game will be finished.
It has been nearly two years since Microsoft shut down Lionhead Studios, the creators of Fable.
While all Fable assets from Lionhead Studios, the shuttered former developer of the Fable series, have been backed up, the new Fable is expected to be starting from scratch.
"I have slightly mixed feelings".
For a Microsoft that has been visibly struggling with big first party exclusives, this could be a shot in the arm that makes Xbox One owners sit up and pay attention.
Fable 4 was originally planned to go into development after the completion of the online title, Fable Legends, a game that was shut down along with Lionhead back in 2016.
No further details are now known about Playground's ambitious title, although it is believed they are starting from scratch despite previous Fable assets being backed up by Lionhead prior to shutting its doors.
The report suggests that Microsoft has identified Playground Games as the ideal studio to head up the project after their excellent work on the open-world Forza Horizon series. 'On the one hand it's great for the United Kingdom games industry, and very pleasing that Fable isn't dead; indeed, it will be lovely to play one as a punter, without coming out in hives'.
The studio had previously said it's working on a non-racing game, but it wasn't until an Xbox Live API leak earlier this year that we found out the game may be Fable 4 - or at least a new Fable. The outfit's second studio - which said it was working on an open-world RPG game past year - is behind this.
Apparently, we have Guerrilla Games' success with Horizon Zero Dawn to thank for Microsoft's renewed interest in Fable.
He doesn't doubt, however, that the team at Playground is "very talented" and will do a "fantastic job".