[We're just about done with a v.successful GDC Europe -- watch for a round-up soon -- but here's part of Peter Molyneux's keynote discussing the just-announced Fable III, a couple of hours after the official debut.]

At his GDC Europe keynote in Cologne, Lionhead's Peter Molyneux discussed steps forward for Fable III, explaining how moral choices in the new game change when the player is king.

As Molyneux explained of the title, due out for Xbox 360 at the end of 2010: "The third in a series... is always a problem one." Fable III is the second game made on the same hardware platform, as well. If you're not careful, he said, there "tends to be a bit of a lull" with the third game in a series.

So, Molyneux said, the main things the Lionhead team considered when designing for Fable III were: "How can we surprise people? How can we get them to expect the unexpected? How many more times can you kill and save someone?"

Essentially, the base change comes in the use of power. In the first Fable, you were one of many heroes. In Fable II you were the main hero, but you brought together other heroes. The big step with Fable III is that "choices and consequence mean so much more if you have power."

Molyneux explained that in Fable III, "the first half [of the game] is about leading a rebellion, storming and overthrowing the tyrant king." But "rather than doing what most games do, which is end there... we then change the game and make you ruler."

The question the Lionhead team then poses to players is: "How are you going to fulfill the promises you made in your journey to rule?" In understanding the use of power, Molyneux and his colleagues looked at European kings through history, who were "really evil vicious bastards" in a lot of cases, he submits.

The Lionhead exec said that "we should allow people to do the mechanics that they used to do - but we really need a new game mechanic." So the spirit of passing judgments on players has been integrated into normal Fable-style gameplay.

Essentially, this is the "ability at any time to say 'I'm going to judge you'". For example, if a girl is caught by the kitchen staff after stealing, the player could say that he is too busy, or simply pass judgment as king, or go check out the situation himself -- triggering a quest.

Molyneux spoke to the pressure and weight of being a ruler, both in real and virtual life, saying: "Sometimes, especially when you take power, you have to be cruel, because only you know what's going on."

The creator also teased adventures beyond Albion in this new Fable iteration, mentioning that "we're unlocking a whole new continent" that he can't really talk about.

Finally, Molyneux tackled the concept of 'touch', which is key in Fable III. He explained that it was an evolution of the 'expressions' concept from Fable I and II, but Lionhead felt that some of the more flippant expressions "end up being a bit trivial" if you're king.

Combining this issue and the problem that "the character feels very detached from the world" in many video games, Molyneux's solution is to make touching other characters a major part of gameplay. He asked: "Why shouldn't we have the ability for the hero to touch people?"

These kinds of touch elements include hugging, embracing, kissing, and -- Molyneux joked -- "I don't think I need to tell you what other touch mechanics we have."

The game will also add dynamic touching, where the player can reach out and hold someone's hand and lead them around the world, Lionhead is aiming to introduce tactile-induced interactions and relationships in Fable III that "start to mean something".