The cheerful hobbe you see above has been rendered in Unreal Engine 3. Lionhead Studios is using Epic's technology to power Fable: The Journey, a first-person Kinect game set in the land of Albion.

We'll ask Lionhead what user-side benefits the technology offers for this game in particular (which is a major departure from the franchise), but you'll be pleased to know that Peter Molyneux's already giving it the hyperbolic treatment in the press release. "Already we are seeing a more beautiful, vivid and unique world full of dramatic moments and have crafted new, never seen before gameplay experiences."

Fable 3 was built on Lionhead's own technology, which could be fairly described as "rickety."