Fable III fails its predecessor in almost every way. Combat, control, and even sometimes the story itself are all lacking this time around. It is clear though that these were conscious choices made by the developer to break the RPG mould; to compromise, dumb down, and appeal to a broader audience that would normally shy away from RPG games. But in so doing, it fails to get just about anything right, and the end result is a game that disappoints everybody. Ultimately, Fable III feels rushed, unfinished, and not very well thought out.
Let's start with the admittedly brave attempt to make Fable III the first 100% menu-less action RPG. This is done by transforming almost every menu into a physical space. Press the start button, and instead of being presented with a menu, you are instead transported to "The Sanctuary", where every menu has been transformed into a room that you walk in and out of to make adjustments, either to the weapons you're carrying, the clothes you're wearing, etc. While this may sound great on paper, for smaller, simpler adjustments it can sure feel tedious. For example, just being able to see what you're carrying in your inventory or changing weapons requires wandering around this nebulous plain of existence for a time, all while your ever loyal butler (though voiced by the always amazing John Cleese) is chatting at you. It can be an odd experience, especially when trying simply to pause the game to answer the phone, for example.
In addition to "The Sanctuary", you level up your character by walking along the "Road to Rule", with gates that open as you progress through the game's story. However you can access this "Road to Rule" in the interim to level up, but rather than quickly flipping through a menu and selecting your upgrade, you must walk down the path, find the required chest that holds what you're looking for, and then walk further down the path to the exit before you can do anything else, all the while sitting through loading screens. While creative, it adds a hugely unnecessary level of tedium to the game.
Much of the marketing hype for Fable III surrounded the introduction of being able to "reach out and touch" other characters, and to form more human bonds with them. Yet, amazingly, your interactions with almost every other character in this game feel even more hollow and meaningless than in its predecessor. Albion is filled with ordinary people that add loads of personality to the game, but when it comes to interacting with them, the game fails miserably. Your interactions have been boiled down from Fable II into either "good", "bad", and occasionally "gross/bad". Of those three, you have no way of controlling what "good" or "bad" interaction will be available. Maybe you didn't want to play pat-a-cake with the town soldier, or sweep the shop-owner off his feet in a sexy dance, but too bad because that's your only option. There's no actual dialogue exchanged past a few awkward, and sometimes unintentionally hilarious, grunts and cheers. When it's over, they'll ask you to go on some tedious fetch quest for them, and all just so you can be their friend. It all hardly feels like a more "human" system of interaction.
It is no lie to say that Fable III's scenery and music are fantastic. The game's sense of ambience is without a doubt its high point. Albion comes alive and is brimming with character. It is perhaps the only aspect of the series improved since Fable II.
However I have to note that one of the first things I was struck by in this game was the almost laughably bad character modelling and motion-capture animations. It's rather jarring to go from a beautifully detailed, fully rendered cutscene introduction to a prelude ripe with absolutely awful character interactions and body language that isn't even remotely close to the tone of the voice acting. At one point your brother the King shouts at you, but his character doesn't move or change facial expressions. I was repeatedly telling my friend who I was playing co-op with "I don't remember Fable II looking this, well, bad."
Which brings me to co-op. While it's nice to have a friend along for the adventure, the story never acknowledges their existence. You're left to assume that your co-op partner is sort of an imaginary friend. How else would you explain the Prince (or Princess) waking up with someone else in the room at the game's outset who no one else seems to be able to notice?
Finally, the story feels rushed and not very well thought out. Without giving too much away, if you enjoy making the "good" moral choices, be prepared to suddenly and without warning need a huge sum of money to continue to do so near the end of the game. In this way the game more or less forces you to consider the "bad" choices, rather than presenting decisions where the line between good and bad isn't so immediately clear. Couple this with the inability to earn "rent" money from real estate investments in real time a la Fable II, and you may find yourself simply leaving your machine on all night to afford to stay on the "good" path.
Of course, the idea that you ever have a morally conflicting choice to make is a flimsy one. From the outset you're being compared with your evil sibling, setting up the obvious desire to counterbalance his tyranny by being upstanding and good. However in the story's endgame, unless you're leaving your machine on all night to grind for money, you really have little choice but to be evil to prevent impending doom. At no point are you presented with any moral ambiguities about the choices you're presented - push A to be good or push X to be bad, throughout the whole game. You're intentionally set up by the developers to be morally conflicted by the game's third act in a blunt and obvious way.
Fable II's shortcomings were easy to brush over because the game was still satisfying to play, and had an amazing sense of ambience. Fable III is gorgeous and brimming with personality, but this time that wasn't enough to carry the game past its rather glaring flaws.