During their conference at GDC08, Microsoft announced new and exciting details for its upcoming role-playing game Fable 2. Firstly, Lionhead boss Peter Molyneux detailed plans to bring the Fable 2 experience to Xbox Live Arcade. Developer Carbonated Games will be working with Lionhead to release an Arcade preview of Fable 2 which will allow players to dive into the world, pre-release, and earn money to be used in the retail version of the game. Earning money, a very important element of Fable 2, will the the essence of the Fable 2 XBLA release. The XBLA title will allow players to experience the universe by participating in mini-games, like a cross between Roulette and Craps shown at the conference, that will allow players to earn money that can be transferred to your character when the retail game ships.

Secondly, and more importantly, a dynamic cooperative mode was announced. The dynamic coop mode allows a friend to join your experience at any time. Unfortunately the infamous dog mechanic will not be available for player two, but the drop in and drop out coop gameplay is a first for the series and promises exciting possibilities. No date was announced for the release of Fable 2, but we were told the XBLA release will hit weeks before the final product.

Update: For clarification, co-op play has only been announced for local play and not over Xbox Live hence the reason we never mention Xbox Live in the story pertaining to the co-op mode. If the drop in and drop out description above led you to assume it was via Xbox Live we apologize for getting your hopes up.