Lionhead Studios’ Peter Molyneux (creator of Fable) took the stage at TED last month to demo his artifically intelligent phenom Milo. His presentation has finally been uploaded to the Internetz and is ready for our enjoyment. The game utilizes Kinect for Xbox 360 to enable the player to interact with Milo and his virtual world with body movements, hand gestures, and speech. The first tech demo was featured at E3 2009, and since then Milo has grown into a more full-fledged game. This new 11-minute presentation explains Milo’s backstory (he has recently moved into a new home), his problem (he is having trouble acclimating to his new surroundings), and how the player factors into the game (you are there to befreind Milo and help him find his way in this new chapter of his life). Molyneux explains that Microsoft’s TellMe database brings Milo out of the depths of standard yes/no responses and into a new era of speech commands in gaming. The Kinect mic picks up your voice and the Milo software recognizes the intonation of your speech patterns. It’s pretty wild. Watch it unfold in the video above.