Sources at Lionhead Studios have stated it's possible that work on Fable Legends may continue.
Speaking with MCV, three staffers at the studio said discussions regarding the free-to-play RPG are taking place.
Microsoft is surveying Lionhead employees on whether to continue work on Fable Legends or leave at the end of April with a redundancy package, according to the insiders.
Once source said Lionhead employees have discussed continuing development on Fable Legends as an independent studio, while others were unable to verify the statement.
A spokesperson from Microsoft told MCV it wasn't sharing "additional details beyond" the cancellation of the game and "discussions with employees" about the closure.
In March, Microsoft announced it had cancelled development on Fable Legends and was closing Lionhead Studios.
Fable Legends was announced in early 2014 for Xbox One and was slated for a 2016 release on the console and Windows 10 PC.