Lionhead Studios announced today they are working on a 4 player co-op set in the Fable universe.

Entitled Fable , players will play as cartoon doll-version of famous characters in the Fable series as they brawl their way through Albion.  The game will have players working together to achieve victory, but they will also have try their best to collect the most coins in a stage to level up their character.  The game will also come with leaderboards and time trials to work your way through.

Lionhead states that the idea for the game came from their yearly Creative Day., where anyone working in the studio can pitch any idea they have been mulling around.  After the project was green lit a 5-person tem has been working on the game since early 2011

Fable Heroes will be an exclusive title for Xbox Live Arcade.  No word yet on a release date.