Lionhead's next potential masterpiece is almost upon us. We headed to a hands-on preview event in London to spend some time with a nearly complete version of Fable 2 and sampled the very beginning of the game. In Fable 2 you're going to become a hero loved by everyone or a villain only talked about to scare young children, so how does the story begin? Fable 2 is a game about choice, so decide now if you want the game's opening 30 minutes spoiled or laid out on a plate.

Our first choice appeared to be a simple one: play as a boy or a girl? We chose to play as a boy, but maybe this will have far reaching consequences. We know that Fable 2 places a lot of emphasis on your character's family and life outside of questing and killing enemies, so perhaps this will result in a very different family life compared to those who play as a woman. Either way, this is something that's new to Fable 2, and something fans have been asking for.

After a brief cut scene (the one we've all seen where a bird clears its bowels from high in the sky) the game begins. We're in a narrow street with Rose, your older sister, wandering down towards a street seller. Before we get there we run into Arfur - a rather dodgy looking man who asks Rose to work for him. He's not the kind of guy you want to meet down a dimly lit alley, and we're a little uncomfortable in his presence, as if he's asking Rose to do things that are very seedy indeed. As we get closer to the stall a LT icon pops on-screen. This is Fable 2's way of saying that there's something interesting worth looking at. You can ignore it and continue on, but being the first instance of it in the game we pulled the left trigger and watched Murgo the salesman work his magic.

You have a dream (as does Rose) to one day live in a huge castle, and Murgo is selling a box he claims grants wishes. The problem is you're broke and he wants five gold pieces for the small box. Rose thinks nothing of it - she's older and wiser than you - but a mystic-like woman appears and changes her mind. You decide to take a quest to find five gold pieces, so off we trot, eager to get back to Murgo and buy the potentially magical box.

It's here that the much talked about breadcrumb trail navigation system comes into play. It's like a fairy tale SatNav system that is always on hand to guide you to your destination. It's not as intrusive as you might think though. Using some kind of magical programming language the guys at Lionhead have made this trail aware of what you're doing. If you're standing around looking like you have no clue what to do next, or where you are, it'll appear, helping you get to your desired location without having to resort to a map.

Initially we meet a guard who has lost five arrest warrants. Conversations with characters start if you walk up to them, with a hold of the A button required to skip the conversation or to accept a quest. If you're feeling particularly rude you can also just walk off. Anyway, this guy says he'll give us one gold piece to retrieve them, and in the absence of any better offers we accept. He gives us a rough location to search in and our quest begins.

As in any good RPG you don't have to work on one quest at a time, so we deviated from our path to round-up the warrants and spoke to a few other people. A guy at the end of a street is setting up a background for a still picture, but he's in need of some people to pose for the shot. Predictably he's offering one gold piece if we pose, so we gladly accept, pose, take the money and move on. Pretty simple stuff, but as an intro to the questing system it did its job.

We've only seen a tiny fraction of what the game has to offer

Next up came our first contact with the dog that Peter Molyneux revealed would be your companion throughout the game. This strong bond begins when we see Rex (presumably the village bad guy) attempting to beat up the poor defenceless animal. Rose quickly rushes to the dog's side, but Rex isn't having any of it. Angered by her desire to save the dog he turns his attentions to the young girl. It's here that you'll get your first taste of being a hero, a key component of Fable 2. We draw our sword, run to Rex and start attacking him with X. This isn't a true hero's sword so it only really gives Rex a few bruises, but it's enough to send him running.

We've done a good deed, something that's essential for building up your moral standing. Four points are added to our moral standing and the gathered crowd acknowledges our heroic actions. This is just a taste of what's to come, with your fame in the world of Fable 2 eventually spreading far and wide. More importantly for the time being we've made a shaggy-haired friend. The dog runs off but it's not the last we'll see of him by any means.

Our next mini-quest is to return a bottle of wine to its rightful owner. A tramp has taken it, but luckily he's fallen asleep, allowing us to sneak in and grab it. Being on our best behaviour we moved as slowly as the 360 controller's analogue stick would allow, - presumably hastier movement would have awoken the tramp. We returned the bottle and claimed another gold piece.

Combat seems simple and intuitive

So far so good, but there hasn't been much in the way of moral choices. These opening few minutes are designed to ease you in to the game, so Lionhead clearly didn't want to overwhelm you with choices, but our next quest allowed us to make such a decision. We were asked to enter a stock room and clear out some rampaging beetles. Buoyed by our recent good deed rescuing Rose and the dog, we accepted and headed in, not knowing that our moral compass was soon to be tested.

Once inside a voice from the window called us over. A guy stood there had a grudge against the owner of the store room and as such wanted us to ignore our mission to clear the beetles, instead asking us to smash up the stock. We had a quick look around, and this seemed to be an awfully easy task. It was going against what we'd already agreed to, but what the hell - all we wanted was money. Out came our sword and the store room was destroyed. We claimed our gold piece, but it wasn't without consequence: a face with devil's horns appeared and our moral rating decreased. Had we turned to the dark side?

A little later we'd found all the warrants and were on our way back to the guard. It was a job well done and we were about to get one step closer to our five gold pieces, however our journey back wasn't as uneventful as we'd though it would be. Arfur the thief appears and wants those arrest warrants - ignore him and there'll be trouble, or so he says. He claims he'll make it worth our while if we give them to him and not the guard. We ponder his suggestion, but our recent wrongdoing in the stock room lingers in our memory and we don't want to go down the wrong path so soon in the game. We ignore his rather heavy handed suggestion and run towards the guard who's just around the corner. He takes his warrants and we claim another gold piece. Job done and our moral standing increases as a result.

We're almost done. We need one more gold piece and it just so happens that another mini-quest is waiting for us near by. A man is standing in the street shouting to his girlfriend stood on the terrace outside her window. Her mother is against the two being together so has forbidden them from seeing each other. Sensing an opportunity we talk to the man and he's got a letter that he wants delivering to the woman. Surely there's a gold piece in it for us.

With the letter in hand we enter the house only to come face to face with the mother. We tell her that we've got a letter to deliver, leaving out the part that it's from her daughter's boyfriend. She says she's going to get us something for delivering the letter, but we were asked to give it directly to the daughter. While the mother is looking for some form of payment we sneak upstairs and hand the letter to the daughter. This is yet another good deed so our moral standing increases again and we're given our much needed fifth gold piece. Time to buy that box.

After returning to Murgo and spending our hard-earned cash we walked to a quiet part of town and used the box. Expecting grand things we were slightly disappointed when it span, caused a mini explosion and nothing else. Not quite the magical wonderment we had in mind, so we headed home (a shabby cart) for some sleep. Our canine friend was waiting for us and we settled down for the night. The next morning we're awoken by Nick, a man who works for Lord Lucien. He's been sent to collect the two of us and take us to Lucien's castle. Did the magic box make our dreams come true? We head off with Nick to find out.

Hopefully the game will be full of creatures like this

Our time with Fable 2 was brief, but even a short hands-on during the opening section is enough to see the kind of gameplay we'll be experiencing in the full game. Despite being a glorified tutorial the opening quest to find five gold pieces could be completed in numerous ways, by doing good or bad deeds. The desire to have a better life came through loud and clear and the bond with your dog seemed strong after only a few minutes of screen time. What we've not seen is how your decisions during quests affect things on a broader scale. We know you can be good or bad, but it'll take some time to see how choices shape the game in the long term.

When playing Fable 2 there's a distinct sense of familiarity. Fans of the first game will feel right at home here, while newcomers will appreciate Lionhead's design choices aimed at making a game that is never frustrating to play - the glowing breadcrumb trail being a key component. Peter Molyneux told us that Fable 2 will be his best game to date and so far we're inclined to agree. The quest ahead of us will undoubtedly be littered with danger, but we can't wait.

Fable 2 is due for release exclusively on Xbox 360 on October 24.