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Peter Molyneux announced a slew of Fable news today at the Microsoft press conference at Gamescom in Germany.

After a brief wilkommen, the father of Fable revealed that Fable II will become episodic, which means that players who haven’t taken Albion for a moral test drive now have a good opportunity to do so. The first downloadable chapter will be free, and after completing it players will have the option to purchase the next chapter or the entire game as they like. Pricing hasn’t been announced, but the first episode will go live on September 29.

Next, Molyneux announced Fable III. The player’s character is the son or daughter of the character in Fable II, and he or she will become the ruler of Albion, which has become a world of mechanical progress. Characters from Fable II will appear, and there will be a canine companion for the hero as well. As always, your decisions will have an impact on your people and your country. You can choose whether to be a benevolent monarch or to rule with an iron fist. You have a choice of eradicating poverty with the wealth of your royal coffer or keeping it for your fabulous lifestyle. As the king or queen of Albion, the royal life won’t dampen your sense of adventure, and you’ll be able to travel beyond Albion to foreign lands.

Molyneux has promised that the story of Fable III will have many branches stemming from choices and their consequences. One such example of choice is the new “judgments” system. Players can hand down decisions on issues ranging from petty crimes to widespread problems that impact the whole kingdom.

Another addition is the “touch” system, which allows the character to physically touch the NPCs. This could be anything from shaking hands — a typical action for political leaders — to “a full passionate snog.” Well, you know how politicians can be. The touch system also allows the player to take an NPC’s hand, for example, and lead them to another location. One example Molyneux gave was being able to rescue a child from a burning house. Instead of pressing the A button to accomplish the whole task at once, the player will have a fully interactive experience of running into the house, picking up the child, and carrying him or her to safety.

The game will be out sometime in 2010, but Molyneux has cautioned that we shouldn’t expect it too early in the year.

Source: Eurogamer