Were you one of the few wondering where the hell Milo and Kate was during this year’s E3? Me too, because Milo should have been there, if only for us to keep an eye out for what will undoubtedly become the real life version of SkyNet.

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Lionhead has released a new development diary for Fable III in which Peter Molyneux discusses the game’s new 3D interactive GUI, and butler John Cleese.

For those not in the know, Fable III will be scaling back on the RPG aspect of the series to focus more on action and adventure. Molyneux wants the player to stay immersed in the experience of the game and “always in action”.

“We still love RPGs, we still adore RPGs but we also love the drama and excitement that action-adventure brings.”

John Cleese is also a big part of the diary. According to Molyneux, Cleese’s butler role will have more lines within the game than any other character, adapting to how your character progresses through the game.

Full video through the cut. It’s well worth a watch.

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The British game developer association TIGA has put forward a plan for giving developers in the UK a tax break, and we learned today that the Government has accepted this plan.

What this means is essentially that the UK based studios will have more money to go around, which can mean more jobs, bigger budgets and so on. It also makes it easier and more lucrative for up-and-coming developers to start their own studio.

Several other big countries in video games have tax breaks for developers, as does the UK film industry, so the British developer community have been pushing for this for a while.

Big studios in the UK include Lionhead (Fable), Rocksteady (Batman: AA), Rare (Banjo-Kazooie, Viva Piñjata), Rockstar (GTA), Criterion Games (Burnout), Bizarre Creations (Blur, Geometry Wars), Media Molecule (LittleBigPlanet) and a host more.

Have you soaked up all the new information about Fable 3 yet? Have you oggled at the screenshots at all? Well don’t rest easy just yet, because there’s more.

Lionhead Studios has released the first Development Diary for Fable III, which skims the surface of the games new mechanics – the lack of a HUD, weapon morphing, the ability to touch characters… and yet another new feature which wasn’t mentioned at X10.

I won’t spoil the surprise. Watch the video to find out.

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New screens from X10 regarding Fable and new gameplay, no HUD, and others.

Take a look.

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Peter Molyneux, whose name I rarely manage to spell correctly the first time I type it out, announced Fable III at gamescom yesterday. The Lionhead Studios chief said a dated mechanic has bogged down the original two titles, and has therefore been removed. Obviously he wouldn’t reveal what that mechanic was, so the internet is free to speculate.

Fable III follows after the last bit of Fable II DLC, which teased a scenario in which the player had become the king (or queen) or Albion. Molyneux said he wanted people to “feel the weight of the crown” and experience what it’s like to be a leader. Players will need to gather followers and do the things rulers do, like taxing.

Lionhead had been teasing a new game in the days leading up to gamescom with splash pages giving us a look into the minds of various revolutionaries. It’ll be interesting to see how they play into the story of Fable III.

Peter Molyneux has just announced in a personal message at E3 that he has been promoted to creative director of the European studio branches of Microsoft Games Studios. He will still continue to oversee Lionhead Studios.

Molyneux already assumed the role as far back as March, apparently.

“What you’re not going to see is ten Peter Molyneux games,” he said. “The value of this role is for someone like myself going in and making those little tiny lights of an idea shine as brightly as possible and ensuring everybody within the organization clearly understands why we’re making those titles, the purpose of those titles and their importance to Microsoft overall.”

“All I’m going to be doing is making sure those lights are as bright as possible. People at Rare and other European studios are super, super bright and creative people and I’ll learn as much about design from them as they would from me.”

Congrats, Peter. It couldn’t have gone to a better man.

Can Microsoft add a motion controller to the Xbox? They seem to think that they can. And they are, in camera form.

“For far too many people, the controller is a barrier preventing people from enjoying the game,” said Don Mattrick from Microsoft. “Can we make you the controller: Yes we can.”

A trailer then popped up, showing us various gameplay modes that featured no controller at all. A kid was playing a kung-fu game by acting out in front of the TV. A family was playing a racing game together, moving their limbs and bodies to interact with the game.

The camera, Project Natal, will feature “Full motion body capture” according to Don Mattrick, as well as being able to scan your own items, like skateboards, and put them into the game. There’s also facial and voice recognition.

“When it launches, it will work with every Xbox 360 sold, and ever Xbox 360 we will sell in the future, including future Xbox models.”

According to Kudo Tsunoda, the creative director of Project Natal, the camera will recognise player’s faces and sign them into Xbox Live. Natal will also allow your movements to be mimicked by your own Avatar.

Tsunoda promises that, “This is a full-body experience, not something you can just do on the couch by waggling your hand!”

New games and features exclusive for Project Natal is Ricochet, a 3D, full-body version of Breakout. A young girl on stage smacks balls into a wall of blocks, destroying them. Another feature, Paint Party, allows a player to fling paint against a virtual canvas. Speaking the name of a colour brings a bucket of said colour into the Avatar’s hand. Blue, green, brown and light brown are all summoned by a simple voice command.

Next, Peter Molyneux walks out on stage! He agrees with the principle behind Natal. The controller is the biggest barrier, and Project Natal is going to change how we game. Lionhead have been playing around with Project Natal for a few months, creating a character named Milo.

Milo can recognise your face, as well as recognising the tone of someone’s voice. He’s a fully interactive virtual human. A player, Claire, interacts with Milo, connecting with him and acting out various scenarios with him. A hand up to the TV swishes water around in a pond. Every hand movement is being recognised.

Claire draws a picture for Milo and holds it up to the Natal camera. It is instantly recognised and appears in Milo’s hand. Molyneux believes this is a real character, someone who knows you personally.

“This is a landmark in computer entertainment.”

If this works, nothing is going to stop Microsoft.

Microsoft will be the first of the big three to flaunt their wears at this year’s E3. What surprises can we expect to see from the Xbox 360 producers at this year’s conference?

Apparently, we should expect a “special last-minute surprise” at the beginning of Microsoft’s conference today. The conference has been pushed forward five minutes to make space for this announcement. What it is? We have no idea, but it will be something big.

We already know that there are huge rumours of a motion controller of some sort, ones which constantly refuse to die, so expect to hear something announced.

The Zune HD has already been announced, and will definitely appear today.

Last by not least, Peter Molyneux and Lionhead Studios will be revealing something new at the event. Anything by the man tends to be a pretty big deal.

- Much more besides, which we can frankly only guess at!

In an interview with MTV, Peter Molyneux admits that Fable 1′s death mechanic was bad, which was kept in the back of the developers’ minds while working on Fable 2:

“We started with saying that ‘The way death worked in “Fable I” was just so tedious,’” said the Lionhead boss, talking of the process of constructing Fable II’s dying set-up.

“There are certain games that, as a game player — not as a designer but purely as a game player — I found very, very frustrating, which ended up as barriers for me going any further in the game. ‘Grand Theft Auto‘ was one of those games. I just found it super-frustrating to have to restart the game.”

The thing is, I never really died in Fable 1. Whenever I did, one of the many Ressurection phials I had acquired kicked in and knitted me right back.

Major Nelson has confirmed that long awaited (and shortly delayed) Fable II DLC, Knothole Island, is now available to download from the Xbox Live Marketplace for 800 Microsoft points.

Major Nelson says this:

Content: Fable II – Knothole Island
Price: 800 Microsoft Points
Availability: All Xbox LIVE regions
Dash Text:[ESRB: M (Mature) BLOOD,LANGUAGE,USE OF ALCOHOL,VIOLENCE] Discover new quests, locations, characters and more in the premium Knothole Island download. Meet Gordon the submariner in the Bowerstone docks, where you’ll be showered with unique gifts to entice you to the mysterious island. There you will embark on new adventures, fight new creatures and find Albion’s rarest weapons, clothes and potions. You will also be able to check your standing in over 50 new Leaderboards on Lionhead.com.

What are you waiting for? Go get it!

Microsoft has just revealed that the recently announced Fable 2 downloadable content, Knothole Island, has been been delayed until “late January”.

The reasons for the delay of the title’s new content, which was originally planned for release on December 22nd, was announced on the announced on the official Xbox website.

“Due to unexpected technical difficulties, the Fable II: Knothole Island expansion will not be available until late January 2009,” said the statement.

There’s not much you can do other than wait, unfortunately.

Peter Molyneux has hinted that Fable 2 may be made available as a full Xbox 360 digital download. The Lionhead Studios boss refused to confirm any plans but told GamesIndustry “I think it would be a great thing for this studio to work on.”

When pressed on whether there are plans for the acclaimed RPG to be made available over Microsoft’s Live Service, Molyneux said “I can’t say anything else on it – We would be killed to death.”

Microsoft already offers a wide range of original Xbox games to download via its Marketplace service including the original Fable has never formally revealed intentions to make full 360 titles available but industry watchers have predicted that this could happen later on in the consoles life.

Molyneux’s enthusiasm for a digital download comes after the success of the original Fable which was made for download on the 360 earlier this year. “It did really, really well, It was one of the highest selling, if not highest selling [Xbox Original titles]. I didn’t track that exactly, but I know a lot of people got very excited about it when it came out.”

Lionhead have announced new downloadable content for their latest game, Fable 2; Knothole Island will be a completely new location with new content, quests, and items.

Knothole Island.

“Hundreds of years ago, the tribe from Knothole Glade discovered the existence of an island far off the mainland said to offer its inhabitants full control over their weather. Tired of constant Balverine attacks and damp, dreary weather, the tribe elders decided they would find this mythic island and settle there.

The ancient civilisation who originally lived on the island created the magical artefacts that control the weather, and hid them in dangerous caves so that their warriors would be tested every year.”

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[UPDATE] Lionhead has just confirmed that Fable II will have online co-op from launch thanks to a day one patch.

“Remember a couple of days ago (or was it a week) where on a blog it was mentioned that Fable II would be shipping ‘without’ Online Co-op? And remember we said we were busting our balls to get it ready in time for a ‘Day One’ release? Well, good news folks! It looks like we’ve done it,”

Original article below.

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