It was "something in development before" Kinect ever arrived on the scene, or was even discussed. It was originally designed to use a controller. Trouble was it "wasn't necessarily a game".
To Lionhead it was "an experiment" that "kind of got a life of its own for a while." The devs stopped fiddling with the idea because they had to start "making some money".
"Microsoft is very kind to let us beaver away on cool ideas," creative director Gary Carr said, "but we cost a lot of money. So we decided to stop work on that and put it to something else, which was Fable: The Journey." Project Milo officially ceased in September 2010 where Peter Molyneux, Carr and others started on Fable: The Journey.
Milo has a lasting legacy for the team though as its water bomb mechanic became The Journey's magic system. "We had these kind of wet balloon games in Milo & Kate where you fill balloons full of water and throw them into the world," revealed Carr. "And we just basically migrated that technology and made it look like magic."
Fable: The Journey however wasn't received anywhere near as warmly as Project Milo, and their E3 2011 debut left Microsoft and Lionhead fighting an uphill battle to prove it wasn't an on-rails 'magic shooter'.
"The public perception out of E3 last year, if I'm honest - and I hate being brutally honest, but I'm going to be - wasn't even mixed. It was pretty negative. And that knocked us back a little bit," Carr admitted.
Recently the new Fable was shown at the Develop conference. "We realised people didn't think we were building a long-form game," said Carr. "This is the biggest game we've ever made, by far."
"You travel around on horseback most of the time; they go pretty fast. You're racing 30 miles through a world - you've got to build a lot of world." It's no short and sweet ride as the world of The Journey is "three-times the size of the last Fable game." Overall a rabbit-run through it takes "15 hours to complete," he said, "so it's a very big experience."
Fable: The Journey releases on Xbox 360 October 9th in the US, 12th in EU.