Today at GDC, Lionhead Studios’ Peter Molyneux took the stage to showcase two exciting new additions to upcoming Xbox 360 RPG Fable 2.

First of all, Fable 2 will feature dynamic cooperative play. Players will be able to drop into to the world of Fable 2 with a friend by their side. Even cooler, items and currency earned in a co-op session will seamlessly transfer over to your single player game.

Apart from the exciting addition of co-op, Lionhead plans to release standalone “pub games” on Xbox Live Arcade a few weeks before the retail release of Fable 2. The games will consist mainly of gambling activities and currency earned in the games will be transferable to the full game.

Hit the jump for six new screenshots of Fable 2.

Fable 2 Screenshots

Read more: Pre-Order Fable II, Get Access To XBLA Pub Games In August, E3 2007: Fable 2 Screens, Fable II Dated, Ships To Retailers October 21, Fable 2 Coming Late 2008, Fable II Online Co-Op Won’t Be Available At Launch