Peter Molyneux, boss of Microsoft’s Lionhead studio, has unveiled the latest in the Fable franchise at GamesCom this morning.

"It’s always tricky when a sequel comes along on the same platform - traditionally this is when sales drop off," said Molyneux, speaking in an exclusive interview published today on GamesIndustry.

"So with Fable III we’re going to take a bold step forward. With the Fable franchise we want people to expect the unexpected, but for the time being we’re just going to be talking about the story."

"I think we need to keep on with the quality and unique experiences within the Fable world. For me that means taking big steps and questioning some of the foundations that Fable is built on," he added.

As well as Fable III, Lionhead will also be releasing Fable Episodes for Fable II. The first of five chapters will be free, with consumers then able to buy individual chapters or the whole set for a "season pass".

"I still hope that even more people will get to enjoy Fable II, so we’re announcing Fable Episodes," he confirmed. "Fable II is broken down into five chapters each one will be released as an episode.

"The first chapter will be free and then in-game the player can decide whether or not to purchase the next episode - or there’s a season pass option that opens up the rest of the game".