We love industry legend Peter Molyneux here at VideoGamer.com. Not only is he not afraid to speak his mind, but when he does so he usually says mega-interesting stuff that gets us all hot and bothered. So it was when we spoke at length to the Lionhead boss earlier this week, discussing everything from upcoming Xbox 360 exclusive Fable II to the PS3 and, well, life, love and the universe. Here, in the first part of the interview, Molyneux tells us his thoughts on the PS3, Fable II's dog and why Microsoft have set PR policemen on him.

VideoGamer.com: Where are we at with Fable II right now? Is it done and dusted? Is it finished?

Peter Molyneux: It is as of 7pm last night. We are now officially gold. It's released to manufacturing. Fable is absolutely finished and done and dusted. There's a lot of people here who are going to want to celebrate. And I'll be honest with you, the reason I have to go at six is because we're all off down the pub.

VideoGamer.com: Well let me just say congratulations on getting the game done.

PM: Well thank you very much. I appreciate it. It always feels like a little bit of a miracle when you finish a game. This is the biggest game we've ever done. Lots of times it just seemed impossible that it was ever going to get finished.

VideoGamer.com: Are you planning a bit of a large one tonight?

PM: The trouble is these things never stop. Just because we've gone gold doesn't mean there aren't a million other things to do. I've got to be pretty sharp tomorrow because we've got what's called a strategy day so sadly I don't think I am going to be having a large one. And it is Monday night as well. Let's not forget that. Hard to go large on a Monday. We're having our proper party on October 16 in London so I think I'll save it all up for that.

VideoGamer.com: I wanted to ask you about the Pub Games glitch. It was reported that it was deliberate. Was it?

PM: I am not really going to say anything to that. All I'm going to say is one of the tenants of Fable was to look at who you really are. I've always said in interviews how do we judge if you're good or evil? We do that by putting temptations in front of you. A word of warning. Don't expect to get off completely Scott free.

VideoGamer.com: You've suggested there's going to be a surprise in store for people who have exploited the glitch. What will that be exactly?

PM: I'd love to tell you about it but we would spoil the surprise. All I'm going to say is every choice, a consequence. If you took the choice to cheat you have to pay the consequences.

VideoGamer.com: In a recent interview you mentioned a few things about the game you weren't happy about - the lip sync being pretty bad, the quality of animation falling off, the navigation being a bit dodgy and the dog can get a bit fractured sometimes. Firstly, why did you decide to mention those issues? We're not used to that kind of honesty from developers before a game is out.

PM: The point is I'm not a PR man. I'm just a developer. And when you sit down opposite people, people like yourself, and they look you in the eyes and they say are you happy with absolutely everything in Fable II, I can't hand on heart say that we have got a state of the art animation system. I mean our animation system is pretty good. If I compare it to any other game we did before it's stellar but is it the best it possibly can be? No. And we've got lots of excuses for that. Our animation is going on all over the world simultaneously and that's why we can't focus on one character. The main thing here is, if I sit in front of a game and pretend that everything is absolutely perfect and nothing is wrong then you're not going to be able to trust me. The trust that people had in me was perhaps betrayed a little bit with Fable 1 because people felt I over hyped the game. It really was important to me to actually try and be honest, only show things when I could show things, and not spoil the story and give away features so that people couldn't have surprises for when the game was finally out. When you do get asked 'are you happy with absolutely everything?', and you've got in that particular interview the person who asked me that, there was a massive face on screen, and they were talking, I'd just be in denial to say that I think it was perfect.

VideoGamer.com: Your fans appreciate your honesty. It's quite refreshing in this industry.

PM: I get into an awful lot of trouble for that. Now Microsoft has put these PR policemen in the same room to make sure I don't trip over myself. But I do feel a sense of responsibility to people.

VideoGamer.com: Specifically regarding what you said about the dog, that it can get a bit fractured sometimes. What did you mean by that exactly?

PM: I was probably talking about a build we had that wasn't completely finished. What I think I meant by that, and it's hard to remember, is that sometimes, when he was in development, and he doesn't do it now, but sometimes he could get slightly psychotic, shall I say? There was one time we had a bug and he would just be obsessed with anything that was evil and would literally follow evil people around the world to the ends of the earth. Obviously that's not what the dog's designed to do.

Now I look at him in the current build and I think he's pretty amazing. The only thing I would say about the dog is don't expect too much. What I mean by that is he's just a dog, man! He's not going to wag his tail at 300 miles per hour and fly through the air and save you from the dragon of doom, not that there is a dragon of doom. He's not going to be able to fart at supersonic speed. He's just a dog. As long as you don't expect too much from him then he's going to blow you away. People have actually said they're far more attached to the dog than they thought they would ever be. I spoke about it a lot. It was one of the first features I spoke about. And then I didn't speak about it at all for a while because I thought, oh my god, people are going to get too excited about the dog and they're going to think this is a game about dogs. And it's not. He's just there as a companion and he's there to give you something to care about. That's his real reason.

VideoGamer.com: I wanted to ask you about another line that's been quoted regarding the PS3. You've said it's still waiting for its defining title. Is there anything in the upcoming PS3 release schedule you see fulfilling that gap?

PM: This is very much me as a gamer talking, not as an industry spokesman. I've got a PS3, a Wii and a 360, I've got just about everything. And I always remember back to Final Fantasy VII, when I first played FFVII, that to me defined the genre. And Tekken when it first came out. Those were the 'oh my god' moments, I don't believe they exist. I haven't seen many of those on the PS3. I would say, and I've got a greedy reason to say this because I know these guys incredibly well and they're only about 200 yards away from this office, but I would say Media Molecule's LittleBigPlanet looks something pretty special. Now I haven't played it in its entirety, I don't know where it stands, I don't know how it will sit, but it's something I think is unique, that we all want. Whenever I've seen it, looked over people shoulders, it looked pretty cool.

VideoGamer.com: So you think LittleBigPlanet could be that defining title for the PS3?

PM: Yeah it could be. The honest answer is without actually playing it it's very hard to say. But looking at it, as I said, it's something that looks different, it's something that, whenever I speak to anyone who's touched it they always come away really excited and you do get that sense of excitement from that. I'll put the question back to you. What would you say is coming up on the PS3 that could be one of those defining titles?

VideoGamer.com: For me personally Heavy Rain looks very interesting.

PM: Yeah, Heavy Rain is the other one isn't it? That is, well we'll have to see. The only thing about Heavy Rain that makes me nervous is that it looks like a fantastic storytelling mechanic but I just want to feel what it's like. I remember seeing a clip from Heavy Rain a couple of years ago and I thought wow, that is fantastic tech and fantastic acting, but I always wondered how that all fitted together into a game. But I agree with you that the emotion that Heavy Rain is getting across is pretty cool. I take my hat off to those developers that are trying to push this and try and push these games into new areas. I think that's fantastic and that's what it needs. Without that experimentation we would be a very much sadder industry.

You'll have to wait till next week for the second part of our mammoth interview with industry legend Peter Molyneux. Trust us, it'll be worth it.