Lionhead Studios' community blog is pointing to SuperHappyFunTimeShow, where you'll find a pretty good write-up of the presentation given by Peter Molyneux at last month's BAFTA event. Prepare for a history lesson:
It was at this time that the name Bullfrog was about to vanish into the history books as one of Peter described one of the last games under their umbrella that was Dungeon Keeper. This innovative game put the player in the role of an evil overlord who happened to have an extensive dungeon, as they generally do. The player had to entice and trap would be heroes in their dungeon by dropping in evil devices and creatures to thwart their progress through it.
Peter sold Bullfrog to Electronic Arts and stayed at the publishing behemoth for a while before realising that he ceased to be a developer but more of a manager. This he wasn't keen on at all and soon left to form a new studio called Lionhead Studios.
The first game new developer created was Black and White. A god-sim in an almost literal sense, the player did indeed take the role of a deity who was represented by a disembodied hand. Peter explained that the main point of innovation of that game was the eradication of a HUD. The way the game provided feedback to the player was via visual and audio queues and not flashing icons. It was this Peter was most proud of about this title. A PC exclusive game, it spawned an expansion and a sequel.
In 2004 Lionhead delivered Fable for the Xbox and PC. This was the first time Peter had worked within the RPG genre and promised it to be the be all and end all of RPG's. Sadly it didn't live up to that promise as many of the features spoken of by Peter himself prior to the gamee's launch, failed to materialise in the final game. It is something Peter regrets to this day and continues to chastise himself over how he promised so much when asked about Fable prior to its release. It got so bad at times that he started spouting out features about the game to journalists that he had only just thought of whilst talking to them. This resulted in the development team learning about new features being added to Fable from the press and not their own studio head. Not a good move.