Lionhead creative director Peter Molyneux used this morning's Microsoft Gamescom conference as a platform to announce Fable III. And, in true Molyneux fashion, he spent a good 30 minutes talking up the game, promising an experience with tougher choices, wider consequences and a generous selection of new game mechanics. So, what can we expect from the third instalment of Lionhead's fantasy RPG? For starters, point your eyes at the Gamescom teaser trailer:

The game is set five decades after its predecessor. The first exciting reveal is that we'll be playing as the son or daughter of our Fable II hero. Existing Fable II save data will be used to determine what kind of 'hero' your character will begin life as in Fable III. Ours was a pie-eating homicidal maniac when we left him, so we can't wait to see how his loin fruit has turned out.

The story involves your hero becoming increasingly miffed at how Albion is ruled. A persistent triple-whammy of tyranny, poverty and injustice pushes him/her to breaking point. And so your hero rises up in a bid to take control of the kingdom. Supporters must be rallied. People must be united. When the time is right, the current leader is overthrown and your hero begins their reign as King/Queen of Albion and sets about the business of ruling.

So what will 'ruling' actually involve in Fable III. There's not loads of information, but Molyneux did say that as King or Queen your hero will still be able to fight (no mention of an army, though), take charge of the treasury and indulge in the odd royal visit around Albion. There will also be a new 'Judgement' system, in which a subject presents themselves in a trial scenario and have to prove their innocence. As King or Queen, it will be up to you to decide whether they are innocent or guilty. There's no mention of a 'behead' option yet, but we're hoping.

Your actions as boss of all Albion will, according to Molyneux, have the power to affect the entire kingdom and how its regions develop. So moral choices will be a big returning feature for Fable III. Will you honour all of those promises you made prior to taking the crown? Will you show compassion, or be a greedy bastard? We're planning on taxing our people for every penny they've got. And, by your side, interfering with business and trying to influence decisions, will be your King or Queen spouse.

Fable III is, again, set in Albion. Obviously things have changed in the 50 years since the last adventure. For example, Bowerstone has increased in size and has distinct 'districts' - we're expecting the social scale to straddle poverty through to affluence and everything in between.

While Albion is the central location, Molyneux revealed that - this time around - it will be just one continent in a much larger world. Frustratingly, he didn't offer any more details. Will we be able to visit other continents? We certainly like the idea of sailing the seas to a foreign land and burning up their shit (or making friends, if that's how you like to play). Or perhaps we'll have to defend Albion against aggressive invaders or even an influx of illegal immigrants. Or maybe the 'larger world' will just be an abstract concept visualised through an in-game map. We'll have to see, but we're sure Lionhead will be planning something ambitious. Cos that's what they do.

One of the most intriguing Fable III titbits that Molyneux mentioned was a new 'Touch' system (Fable II's 'Expression' system is sooooo last year), which Molyneux described as a way to cuddle, reassure and embrace characters in the world and that it would help create a real sense of emotion by moving away from the traditional 'Press A Button' level of interaction. Is he hinting at some kind of compatibility with the controller-free magic of Natal? We know Lionhead are already developing Milo and Kate specifically for Natal, so some integration with Fable III certainly isn't beyond the realms of possibility. Would we want it in Fable? To be honest, we'd need convincing.

Oh yeah, in case you're wondering, Fable III will be released at the end of 2010.