Fable 2

So you won't be exiting to lobbies or pre-arranging to meet your pals in Fable 2. Rather, in couch co-op, you'll simply throw a spare controller to your friend and they'll pop in, LEGO Star Wars-style. Online, things get a little more interesting.

It's all to do with orbs. These look a little like pearls, and move politely about the world of Fable 2 as if minding their own business. And they are minding their own business: every orb you encounter is somebody on your friends list who's independently playing through the game. The orb shows their position, allows you to chat, gift them items, compare stats, and even boot them out of your world. It also allows you to invite them in to join you properly.

Co-op in Fable 2 is a bit like inviting a friend to see your Animal Crossing village: players come to your world to look around as much as anything else. "This works for us because your character and world will be so different from theirs," explains Molyneux. "It's shaped in part by the decisions you've made in the story, and then there are all the little additional choices: 'Jesus, you bought that house? You have three kids?' These simple things that change the world can make showing off your version of Albion very special."

In online co-op, guests will appear in one of several available henchmen models, reflecting the choices the hero has made. In offline, if there's another save on the HD, you get to wear your own clobber.

A focus on showing off isn't the only innovation. Guests join your game not as an equal adventurer, but as your henchman, a role that is actually classified as a job within Fable 2's career structure. This means the game will pay them an hourly wage for working for you, and you can negotiate an additional split of gold and experience gained, using a set of bargaining sliders on the invite screen. Anything your guest earns will travel back with them to their own game when the co-op is finished; it's a bit like temping.

This sounds a little complicated at first, yet the more we saw of it, the more it impressed. Lionhead's system acknowledges the social context of co-op that other games ignore, and the bargaining over who gets to be the hero and how much the henchman is paid is a crucial part of the fun. "Your friend might say, 'I can't work out how to open this door,'" suggests Molyneux. "You can say, 'I'll give you a hint, but you'll have to pay me.'"

In practice, the process of agreeing fees and pulling someone in is as seamless as promised. But you'll have to be careful: although it is possible to turn off friendly fire, anything the henchman chooses to do in the world will have real effects, as proved by the now-famous GDC demo, in which Molyneux's own henchman killed his husband and sent his child to the orphanage.

If this all sounds like the kind of needless reinvention Molyneux is famous for, he argues that it's aimed at creating a different kind of co-op experience, one focused on impromptu get-togethers rather than pre-planned marathons. "Seeing that little shiny orb in the distance and thinking, 'That's Peter! I haven't spoken to him in ages!' and walking over, saying, 'Let's do ten minutes together': that's wonderful, and very different from planning to go to a lobby, pulling someone in you may not know, or phoning somebody up saying, 'Hey, are you playing Fable?' It's a psychological thing. It feels like a bridge between full online and single-player."

Fable's world is a picturesque wilderness - it's like CentreParcs without the weird dome and horrible food.

And if you don't want to wait for an orb to roll up, you can get the status and location of friends by switching to the map screen, which also allows you to jump right to them. Equally, Lionhead is currently exploring ways of letting you decide which kind of orbs you see outside of your friends: everyone in the same location as you, for example, or anyone with a similar gamerscore.

The orbs are a neat idea, but there's a nagging concern that Fable 2 may turn out to be nothing but neat ideas, with no core game to tie all the interesting elements together. Molyneux admits it's a trap he's fallen into before. "I've learnt more about actually being a designer doing Fable 2 than on any other game. A gameplay mechanic can be very exciting and make you go all funny inside, but it's only as good as the ability for people to play with it, and it's useless if it doesn't aid the drama."

This time he's convinced that Lionhead has cracked the drama as well. To prove it, he boots up the opening tutorial and lets us wander around. Following a wintry cut-scene (one of only five minutes' worth in the entire game) featuring the most elegiac treatment of having a bird poo on somebody that we've ever seen, we're transported to the village of Bowerstone, a Victorian Christmas card come to life, and the place where the story of Fable 2 begins. It's simple, but effective: a mysterious market stall purchase leads to a midnight encounter at a nearby castle, where events quickly take a turn for the worst. Before you know it, there are destinies to be discovered and crimes to avenge: it's a swift and confident kick-off, heavy with potential, and it's all done in under ten minutes of playing, while still finding time to introduce a few of the game's more important mechanics.

Chief amongst these is the morality system, a far subtler beast than the original Fable's. There are still quests terminating in a simple moral choice, yet the game's also watching you when you least expect it. Early on you're asked protect a dog - yes, that dog - from a beating at the hands of a local urchin, but there's more going on than a combat tutorial. Knock the bully away and the dog is saved, but if you choose to give the urchin a good kicking (and you can be surprisingly brutal) the game will take note. Once again, your morality will ultimately shape your appearance.

Bowerstone's cobbled streets also allow Molyneux to show off one of the game's most controversial features: the breadcrumbs. Lose your way in Fable 2 and a glimmering path will eventually appear, showing you the route to your next target. The system may seem doomed to turn a free-roaming adventure into Perfect Dark Zero, but, as with the orbs, a lot of method's gone into this madness, and something we instinctively disliked turned out to be far cleverer than expected.

As in PDZ, breadcrumbs can be switched off entirely, and Fable 2 reacts to how you use them, and tweaks them accordingly. But there's more: just as the game seems to be turning into Dickensian Scalextric, your dog arrives, and the whole system gets a lot more flexible. If the breadcrumbs are there to keep you from getting lost, the dog is there to give reluctant players the confidence to explore. Low maintenance and utterly convincing as an animal, if there are secrets, treasures, or an alternative path nearby, your dog will alert you to them with a helpful bark, and the breadcrumbs will always be there to lead you back to your real destination again.

For every choice, a consequence. For every consequence, a slightly different haircut.

Again, like the co-op, this initially seems unnecessarily complex: how many other games give you conflicting mechanics that lead you down a set path while also tempting you off it? In implementation, however, it's surprisingly effective at encouraging exploration without allowing you to get lost, and it's as pure an indicator of Fable 2's design goals as you could wish for. Lionhead wants to have it both ways with this game: it wants something that's simple for those who like their games short and sweet, while also having the optional depth for those who want something more involving. It's studied the things that make casual gamers uncomfortable, and created tools to allow them to feel safe, hopefully without ruining everyone else's fun too.

If the breadcrumbs make that intent clear, it's combat that allows insight into how the designers are faring - and, happily, combat may be Fable 2's masterstroke. "One-button fighting" may not sound very involving (and the name isn't misleading: melee, ranged weapons, and magic each have their own face button, and it's perfectly possible to play through the game at that level if you wish to) but deeper options are still available.

Take sword-fighting: a single press triggers a basic swipe, but moving the left stick while holding the button down gives you a flourish move: you'll do more damage, but be more vulnerable. Tapping in time with the rhythm of the music also enhances attacks, as does the game's context-sensitive system, which brings the environment into play depending on where you're standing. Spells and ranged weapons have the same depth - guns and bows can auto-target or switch to a manual aim, and a variety of different spells can be selected by varying the length of the button press, aimed with the left stick, or used in combination.

Expect pregnant adventuring to show up in a lot of other games after this - we hear Hawx is planning on it.

Our combat demo is a fight through a misty swamp, with enemies lurching out of the ground and attacking in groups. It's a genuine thrill to battle them, and the way the system allow you to switch weapons with no planning meant we were quickly chaining attacks together, finishing off nearby nasties with flourishes, then taking out ghouls in the distance with the shotgun. There are surprises everywhere, most of them delightful, such as when a force-push spell allowed us to finish off six skeletons at once by flinging them against a wall, and ultimately it's far more satisfying than you may expect from combat in a title that has so many other items on its agenda.

Slowly, then, Lionhead's game is starting to take shape out of the mess of inter-linked XBLA distractions and whirlwind marriage opportunities. Furthermore, the shape it's starting to take is a familiar one: Fable 2 is about as close as you can get to a single-player MMO. Not only does it share the same preoccupation with character evolution and customisation (which will be a lot deeper this time; Molyneux admits that many players treated the original's options as mere "Easter eggs"), it also uses a lot of the same formulas and conventions, from the way it doles out its quest-givers, to the evolution of the original game's property-buying, which now theoretically allows you to own every building in the game.