The development and potential release of Peter Molyneux’s Kinect project Milo & Kate can best be described as something of a clusterhump. First it would see release, then it wouldn’t, then no one knew, and now it appeares to be on again.

Last week at the TEDGlobal Conference in Oxford, Peter Molyneux said Microsoft wasn’t planning on releasing Milo & Kate. Microsoft’s Aaron Greenberg said two weeks before “right now, it’s not a game”. Eurogamer spoke to Greenberg again last night, and there’s still a chance Project Milo will be released.

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Peter Molyneux confirmed today that the upcoming Fable III will not only be released on disc, but also in episodic form on Xbox Live Marketplace. This was announced at GameHorizon in Newcastle.

This concept was tried with Fable II to great success, raking in over $15 million in revenues.

“Soon after the retail launch we’re doing episodic,” said the Lionhead boss. “We break it down in chapters. We give away the first chapter entirely free, the first hour.

“When you reach a certain point in the game it says ‘thank you for playing the pilot of Fable 3, do you want to spend an extra 2-5 or whatever dollars to buy the next episode, or buy the whole lot?’ Press ‘yes’ and you will immediately continue playing.”

Molyneux is also hopeful the game will sell close to 5 million units. Fable III releases October 26 on Xbox 360 and PC.

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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It seems no matter how many promises he makes, Peter Molyneux just can’t stop boasting about his games. But y’know what, we can’t really blame him for it, because he’s such a wonderful guy either way.

In an interview with IGN, Molyneux claimed that Fable III will be sporting “the greatest cast that any computer game has ever had,” which is a bold claim for sure. Not only is John Cleese along for the ride as the player’s butler, but Stephen Fry returns are Reaver. Jonathan Ross is also in, playing a yet undefined part.

But it’s not the cast itself you should be excited about, but how their performances are integrated into the game:

“This is not like traditional dialogue – we went into a studio with John Cleese and I think he’d never done anything like this ever before, because we had to say ‘if the player is like this, how are you going to react’. It was a very interesting process.”

Though it won’t be easy. Fable 3 is going to have to contest with the likes of Ripper, Wing Commander 4 and Red Alert 3. Say what you want about the quality of the games, they had some star studded casts.

Speaking to Joystiq during this the SXSW event this week, gaming luminary and all round nice bloke Peter Molyneux spoke highly of the PS3 exclusive Heavy Rain, seeing the game as an important step forward for the industry.

“I recommend anyone who wants to start to see the first glimpses of the future of video games to go out and buy it,” Molyneux stated

“But there’s no question in my mind that games like Heavy Rain — games that have a new fidelity in the way that they present their experiences; obviously made with cinematography and motion capture in mind — can really show the way forward to a new form of entertainment, which is evolving the story and choices and consequences.”

“But, personally, I could not bring myself to play more than 90 minutes, because the world that was there was so dark and so emotionally involving I felt emotionally beaten up,” Molyneux explained.

The man speaks wise words. If you haven’t played Heavy Rain, go out and buy it. Right this instance! You’re only denying yourself, you know?

“And as soon as you see that you think: ‘Oh my God. What a talentless bastard I really am.’”

What’s Molyneux talking about? Well, an interview at CVG showed the Lionhead boss that more than half of the people who played Fable II used and understood less than half the features of the game.

“How can I have made a game in which people actually understood less than half of its mechanics? It’s like making a film that makes people think: ‘It looks quite cool. I don’t know what the hell is going on, but it seems quite cool.’ You know, that’s just wrong,” he went on to say.

Last week at X10, Molyneux said that his announcements for upcoming game Fable III would “piss off” people.

Molyneux has managed to piss zero people off so far.

By accident, the ESRB website revealed that Peter Molyneux’s 1994 title Magic Carpet will be available for the PS3 and PSP as a PSOne classic.

Also revealed was Sorcerer’s Maze from XS games which seems to be a puzzle game.

No official release dates for either game have been announced.

PS3 owners will finally be able to play a Peter Molyneux game! Shame it’s not Fable. :P

Fans of Peter Molyneux knows there’s one thing the man can’t stop doing: over-hyping his own game. But it seems old Mr. Molyneux has had to eat his own words one too many times.

“I definitly have learnt my lesson about over-promising.” he tweeted. “There is a ton of work to do for sure, and the team are working hard. I truly believe”

Though I seem to remember him saying the same thing when Fable 2 was about to roll out.

Last week at X10, Molyneux showed off the new Fable 3, revealing the game would have no HUD and no levelling system. According to Peter this would “piss people off”, which it really didn’t.

Check out the first developer diary here, and the first screenshots from the upcoming game here.

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 is also present at Microsoft’s X10 event today and is showing off Fable 3. What’s in store for the new heroes of Albion? Touching!

But not touching with Natal, which so many seemed to speculate on. According to Molyneux, the “touch” mechanic allows you to bond with other characters by touching them. This will “narrow the emotional boundary”.

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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.

A survey held by the Develop Conference has found that Shigeru Miyamoto is regarded as the hero of the game development community. No surprise there, really.

The Develop Conference is an annual event drawing in developers from throughout Europe for what is essentially to devs what E3 is for press – a pile of speeches and information on emerging tools, tech and troubles, as well as some contact making and chin-wagging.

It sounds like a small event, but when you consider that such heavy hitters as Ubisoft, Little Big Planet developers Media Molecule, Crytek UK and Lionhead Studios are making an appearance you realise how much of a big deal this is for the developer community.

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You certainly can’t fault Peter Molyneux for his enthusiasm.

“Just about everything you think is the Holy Grail in design, throw it away and start again.” This is what the man himself believes Natal will achieve.

Have a watch.