Ignoring all empirical evidence pointing to the game being an on-rails shooter, Peter Molyneux insists that Fable: The Journey is an NOT on rails shooter developed by Lionhead Studios. It's set in the Fable universe, after "the time of heroes". Albion is under attack, this time by some kind of evil presence, and no heroes are to be found. A lone carriage rider is recruited to be Albion's savior by Theresa, whom he must carry across Albion to save the kingdom.
The game is entirely played via Kinect. You use your hands to create spells that you then send towards enemies. Your spells vary depending on your hand movements. You'll also use your hands to control a carriage and punch enemies. The game is open world as you can control your carriage down different branching paths.
The game was first revealed at E3 2011.
Peter Molyneux and the fact that the game is not on rails
Despite the fact that the game takes the player's control over movement during combat, only requesting them to aim and shoot at everything on screen, Molyneux has come out to point out the fact that the game is not on rails. He did this during E3 2011 where, while presenting the game to journalists, he wrote on a white board in big capital letters that the game was not on rails. He then had every journalist attending the event sign their name under the statement. He then told OXM:
I'll just state on record now that Fable: The Journey is definitely not on rails
Whether or not Molyneux is telling the truth is up to interpretation since the game does feature a horse riding mechanic where you can take your horse down branching paths. It has also been confirmed that each combat level will have branching paths that you can take. However, demos have clearly shown that you do not fully control your character's movements and that your character will only move along once all enemies have been cleared from the screen, which matches the traditional definition of "on rails" as pertaining to videogames.
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