Lionhead may not have Peter Molyneux at their helm these days and no one knows whether there's going to be Fable 4 or even a Black & White 3, but the studio's evidently hard at work on a new game that's being developed with Epic Games' cutting-edge Unreal Engine 4.
The studio, which is largely renown for its work on the Fable and Black & White series of games, has posted a job ad calling for applicants to work on a new, Unreal Engine 4-based title. Presumably, the game is being developed for Microsoft's next-gen console.
The discovery was made by internet sleuth Superannuation, whom you may recall from his discovery of Aliens: Colonial Marines' staffing issues. According to his findings, the studio is searching for an Audio Designer to work at the company for four months.
Lionhead has since pulled the advertisement, no doubt due the fact that they may not wish for word of whatever it is they're making to get out before they're prepared to make a formal announcement.
In any case, it goes without saying the studio is working on something for Microsoft, but whether they plan to reveal it with Microsoft's unveiling of its next console remains to be seen.