On January 30, 2008 Microsoft began hiring for Xbox Live Digitally Distributed Games (DDG) team, described as "a newly formed organization focused on digital distribution of games via Xbox Live Marketplace". Shortly after, internal studio Carbonated Games was disbanded on March 27, 2008, with some employees being folded into this new group.
General manager of Xbox Live, Marc Whitten, officially announced the studio on May 22, 2008. The first game to be released under the new label was Fable II Pub Games on August 13, 2008.
In 2013 Xbox Live Productions was rebranded as Launchworks.