Microsoft  and Lionhead Studios announced Fable III. The game will be available exclusively on Xbox 360 in the 2010 holiday season.

Peter Molyneux, Lionhead’s creative director who also serves as creative director of Europe, the Middle East and Africa for Microsoft Game Studios:

“We’ve spent a lot of time at Lionhead thinking about how we can innovate the gameplay and progress the world of the Fable games for its third chapter, and we’re confident that players won’t second-guess what we have planned for ‘Fable III. Though I can’t give too much away right now, players should expect to have to make much tougher choices with far wider consequences than ever before in Albion — and with many more interactive adventure elements.”

Fable III begins five decades after the events of Fable II, and place the gamer as the child of his hero from Fable II.