Fable Heroes was announced during Microsoft's Spring Showcase last month, and according to designer Ted Timmins, could bode well for future downloadable Fable-inspired titles if it sells well. The project began as a one-day effort borne out of an internal event at Lionhead called "Creative Day," but twenty-person development team was given the green light to further develop the action-strategy-board-game hybrid into a four-player XBLA title.

Read more: A Fable starring puppets »

Perhaps the most interesting use for the Xbox 360's Kinect controller was Lionhead Studios' virtual child simulator Milo and Kate, though a lot of questions lingered over it. We first met the young lad Milo in 2009, carefree and innocent as he chatted with the player, but the project slipped out of sight and was eventually shelved. This, Peter Molyneux has said, is because the industry simply isn't ready for a such game built around forming an emotional bond.

Read more: "The wrong concept for what this industry currently is" »