Unfortunately, that ends, he says, when big companies start pouring money into iPhone games. "It's inevitable that a Star Wars or Disney game, a five million dollar iPhone project, will be released. And when it does, consumers are going to like it. They're going to say "I can pay 59p for this [indie iPhone game] or I can pay 59p for this [triple-A iPhone game]."
He's cultivating creativity in his staff now (giving them less incentive to, say, go make iPhone games) by instituting a one week period in which Lionhead staff can work on whatever they'd like. "And at the end of the week we're all going to come together look at people's ideas, and that's going to form the foundations of what happens next at Lionhead."
Speaking about his own game, Fable 3, Molyneux dismissed the most notable features of many RPGs. Most developers took the wrong inspiration from Dungeons & Dragons, Molyneux believes, emphasizing stats and random numbers. "But actually," he said, "the purity and the core element of role playing games is to feel more powerful. That's the true core of them. It's about growing as a character, finding and collecting things, and freedom. What we want to do is amplify those feelings with Fable 3."