New details have been revealed for the next installment in the highly acclaimed Fable series, Fable 3. At Microsoft’s X10 event, Peter Molyneux the head of Lionhead Studios has revealed the big three innovations that will make the latest entry in the series the best one yet: touching, weapon morphing and kingdom ruling.
 

Players can now interact with other NPCs in a very different way in Fable 3. using a new context-heavy system which focuses on the player’s character grabbing hold of NPCs to interact with them. This also can be used during Co-op play which as Molyneux promised will be a true Co-op experience, unlike what we have seen in Fable 2.
 

The second biggest innovation Fable 3 will have is weapon morphing. The look of your weapons will dramatically change depending on your actions. Whether a weapon drips blood or glow depends on if you kill innocent or evil people. Also, the duration of your battles and how often you will fight will play a big role in shaping up your weapons. Your gamerscore will also affect the shape of your weapons as well.

At the half point of the game, the game will give you the opportunity to be the ruler of the Kingdom you are living in. Whatever you rule evilly or goodly, it’s up to you. Last but not least, Fable III will also include a major overhaul of the on-screen user interface and will no longer have a health bar meter or experience points. Instead, the game will use an auto health regeneration system similar to the system found in most of the shooter nowadays, and your experience is shown by the number of followers you have, not by how many orbs you have obtained.
 

Fable III is shaping up to be a very different experience from the previous ones. The game is expected to be out by the end of 2010 exclusively for Xbox360. Before you go, check out the the first in-game screenshots for the game below.