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It seems Peter Molyneux wasnt entirely happy with the footage he showed of Lionhead's upcoming Kinect title Fable: The Journey and has stated that the game IS NOT on rails...
... I made a horrendous mistake on the press demo of taking out the navigation allowing players to move. I'll just state on record now that Fable: The Journey is definitely not on rails.
http://www.youtube.com/user/cvg
http://www.youtube.com/user/cvg