Who was there: Peter Molyneux, creative director of Microsoft Game Studios, Europe and head of Lionhead Studios, delivered his speech to a packed auditorium. The developer was supported on stage by Josh Atkins, studio design director, Microsoft Games Studio to demo the game's new features.

Lionhead's Peter Molyneux.

What he talked about: Molyneux's Game Developers Conference session had the general topic, "The Complex Challenges of Intuitive Design," but it was specifically focused on Fable III. The game, which is currently scheduled for release in the fourth quarter this year, was shown live on stage, while Molyneux dropped info on possible Natal support, John Cleese's appearance as the player's butler, and the new Twitter-influenced "followers" feature.

Molyneux started his session by looking back at the success of Fable II but also reflecting on its weaknesses. Originally hamstrung by its role-playing game status, Molyneux is now keen to position the Fable franchise as an action adventure game. "Marketing people find it difficult to market an RPG, but if you're talking about an action adventure game, it's all about drama, and it's easier to sell," he claimed. Fable II sold around 3.5 million units on the Xbox 360 according to the developer, and he wants this number to rise to 5 million for Fable III.

Molyneux's recent Twittering has influenced Fable III, with the concept of "followers" playing an important part of the game. "What if we had this simple idea, that everything you do had you gaining or losing followers. If you marry the right person, you get a lot more followers. If you marry the scullery maid, you'll get no followers. Followers can add to our live and co-op experiences."

A good chunk of the session was dedicated to Fable III's new user interface. There will be an emphasis on interaction with real-world objects, rather than going into a menu. An example of this is the Guild Chambers, which is accessed when the player presses the start button. "We have a character here who's your butler," said Molyneux as the game was demoed onscreen. The butler will lay out the best clothes for each situation, allowing the player to carry out political or espionage missions dressed in the correct attire. As an added bonus, British actor John Cleese will play the role of the butler, adding what Molyneux described as a "Monty Python-esque" feel to proceedings.

The developer also expanded on the idea of "touch" and how it will add to the game. "We were totally inspired by Ico; what an amazing game that was," he said. Referencing the physical relationship between Ico and Yorda, touching characters in Fable III will have differing results. "When you first meet [characters], you can touch them, shake their hand. After a while, the emotional bond between you grows stronger."

John Cleese's presence will add a Monty Python sensibility to Fable III.

Molyneux showed a charming demo where he grabbed his daughter and took her to the local pub. At the door, the girl was heard saying, "Dad, that's the pub. You promised mummy you'd never go there again." Touch was also demonstrated with an unfamiliar character--a beggar on the streets. The player's character can grab a beggar by the hand and pull him into a nearby factory, selling him for labour. The beggar pulls frantically on the player's hand, trying to resist, but in this instance, he's too weak to break free. As has been previously mentioned, physical attributes will change all the time, so if players favour melee weapons, such as swords and hammers, they will become progressively stronger over time.

Taking questions from the audience, Molyneux touched upon technical issues, such as Natal integration and a possible PC version of Fable III. "I can't give you specifics, but it's been a real joy to put some Natal stuff in [Fable III]," he said. He was similarly elusive about the PC version, saying, "I love the PC. I was born on the PC (not literally). I would love to see the Fable franchise on the PC. I want to make sure it's a truly amazing experience on the PC."

Quote: "How many of you bought Fable II and didn't finish it?" (Lots of people in the audience raised their hands.) "Yeah, quite a few, you bastards."--Peter Molyneux, on the decision to make Fable III's features more transparent.

Takeaway: Molyneux has experimented with Natal support in Fable III, so expect to hear more on this in the future. British actor John Cleese will appear as the butler, adding a Monty Python-esque vibe to the game, and Molyneux hopes that it will go on to sell more than 5 million copies.