The head of Microsoft's European games division, Peter Molyneux is building an astonishing new "virtual friend" who interacts with you.

Why you should listen

Game geeks have been buzzing about Project Natal for, seemingly, ever -- Microsoft's now-in-development gaming device that goes the Wii one better by allowing your whole body to become the joystick, using touchless, visual-recognition interface technology. What kind of game will be played on this immersive new equipment? Peter Molyneux is working on one that redefines the whole notion of "game" -- Milo.

Milo is a little boy (there's also to be a little girl, Kate) who quite simply acts like a little boy, learning your name, talking with you, going on walks around the lake. It's an immersive, slightly uncanny experience, as seen in the single year-old demo that's still blowing minds on YouTube. Molyneux himself is a game-industry legend who has created many titles. In 1997 he founded Lionhead Studios, makers of Fable, a role-playing game. Microsoft bought Lionhead in 2006, and will release the much-anticipated Fable III in the fall.

What others say

“Milo represents an ambitious project, presenting a virtual relationship that suddenly seems very real. This isn't any old Tamagotchi. And that it's still so early only encourages me.” — Christopher Grant, Joystiq

Peter Molyneux’s TED talks