COLOGNE, Germany--After spending nearly three years in third place, Sony threw down the gauntlet yesterday at the 2009 GamesCom. First and foremost, the financially ailing electronics giant announced that a new $299/£249/€299 PlayStation 3 would launch on September 1 in North America and on September 3 elsewhere. The company also unveiled PSP Minis, a new "snackable game" initiative that will bring arcade and casual titles to the portable's download store at an affordable price.

　　Peter Molyneux, OBE

　　Today, it was Microsoft's turn. Its press briefing was the first event of the first official day of GamesCom, and had, like Sony's, been preceded by many rumors about what would be announced. The majority of speculation centered on the 120GB Xbox 360 Elite's price dropping to $299 and the 60GB Xbox 360 Pro model being phased out. Sony's move will certainly put pressure on Microsoft to take the former step, which could affect the bottom line of the software behemoth's money-making game division.

　　So what is Microsoft likely to unveil? Well, Lionhead's Peter Molyneux is due to make an appearance, and his company's Web site has been teasing images of famous revolutionaries all week. Will the company be showing off its follow-up to Fable II, or could this be something to do with Milo and Project Natal?

　　[1:17] Peter Molyneux is onstage talking about Fable II going episodic. He says Fable II is in five chapters, and each of these chapters has a natural break. The first chapter will be free, when players get to the end of the chapter or buy the rest of the game. All this happens in-game, and it will be released September 29. It will also be fully compatible with the expansions Knothole Island and See the Future.

　　[1:19] Molyneux says that the third in the series and second outing on the same format can be a problem. Players must always be surprised, must always "expect the unexpected." He says, "I think there's something fundamentally wrong with Fable."

　　[1:20] That's right, he just announced Fable III.

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　　Fable III Teaser Trailer

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　　[1:20] Now a Fable III teaser is being shown. Voice-over says: "The kingdom of Albion is changing. The race for the crown has begun."

　　[1:20] "You are going to become the ruler of the whole of Albion," Molyneux says.

　　[1:23] "We want you to be king or queen, but you're not going to be that right away. You start as the son or daughter from your Fable II saved game," says Molyneux.

　　[1:24] "You will inherit your past indiscretions," he continues.

　　Fable II just had a kid. [1:26] Molyneux: "You're going to overthrow the terrible tyrant that overrules Albion. You're also going to have to promise some things to the people of Albion. Like politicians in the real world, you're going to have to promise everything. You know, I look at Obama and he looks a bit haggard now. It looks like the truth has been revealed to him."

　　[1:29] "In the journey to rule, you're still gaining support. You're having to fight, and that doesn't change when you become ruler. You can still go and visit places within Albion. One of the things you can do with all [your] gold, is decide where to allocate it. You can say 'I'm going to build up a certain region' or 'I'm gonna let some people off their taxes.'"

　　[1:31] "50 years on, Albion looks a lot different, a lot more industrial. A lot of injustice, a lot of crime takes place. What are you going to do about that? A good portion of this game is set in places you've never seen before."

　　[1:37] Molyneux is showing a video of voice actors working on Fable III. "We went to [famed film studio] Shepperton Studios, to do voice-over work for Fable III. We've been doing this for weeks and weeks, trying to get to the heart of the story," he said.

　　Will you be a good or an evil king in Fable III? [1:41] "We've got a new gameplay mechanic called 'judgments.' As king, we have the ability for people to come before you, and you say, 'I'm going to judge you.' Let's take an example: Someone comes in and says, 'We've caught this girl stealing food.' Players can call in the cook and she says, 'We've caught her stealing and we need to set an example.' Then, players can either go and investigate further or can summarily decide her fate. If a player continues, the girl might say, 'I'm starving and my family needs some food' and you can go out and see her family. You can think of this as a new way of accepting quests."

　　You will see more of Albion than ever before in Fable III, according to Molyneux. [1:44] "The other new mechanic that we've got is called 'touch.' This idea of touch came about from you being ruler. We were thinking about the expressions system in Fable. [In Fable III] you can shake someone's hand, and then that might turn into a hug. You can then turn that into an embrace, and then into a full-on snog. I'm not going to tell you where that's going, but you can imagine."

　　[1:48] "Unlike in Fable II, where you would just press A to save the child, once you've got touch, you run up, the child is pulling against you. You can pull them through the fire, through the door, and then outside where everyone can see you've saved a child. I'm going to tease you with how we're doing this, and it's one sliver of what we're doing with Fable III." The way that Molyneux is gesturing, it sounds like he's talking about Natal, although he doesn't mention it by name.

　　[1:48] "Fable III will be coming out in 2010 on the 360…don't expect it too early in 2010. We're still working on [Project Natal game] Milo and Kate."

　　[1:50] OK, that's it. Molyneux is giving a talk this afternoon at GDC Europe.

　　[1:57] No, that's really it. No price point reduction, no more announcements. Guess that $299 price drop is just a rumor…for now.

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