That was the news – Week 16, 2008: Fallout 3 dazzles at London showing

It's nice to know there's more to talk about in games than GTA IV. Bethesda's marketing boss, Peter Hines, gave us an hour of his time last week to show us the latest build of Fallout 3. As far as we're concerned, this was the biggest news last week. Mainly because it looks so stupidly good.

Impressions of the demo follow.

WARNING: There are spoilers galore in here, especially about the beginning of the game. If you want to stay virginal, look away now.

Fallout 3's premise is thus: mankind blew itself up, and some humans retreated to Vaults. You are born in Vault 101, a sealed bunker which no one enters or leaves. The game begins with your birth, a blurred image of your father hovering over you as you open your eyes for the first time. Your parents' joy is short lived, however, as mother Catherine dies after your arrival, leaving father James to bring you up.

Your choices begin immediately: you decide if you're a boy or a girl, then select facial features based on a Vault impression of how you'll look when you're an adult. Neatly, the game then procedurally generates your father's face based on your choices, meaning James looks like Dad when the newborn fog clears.

One year on. You're in the playroom. James teaches you to walk, look and generally control your character. At this point you pick your SPECIAL (Strength, Perception, Endurance, Charisma, Intelligence, Agility, and Luck) characteristics from a play-book called "You're Special". This is just a set off modifiers which dictate how your character will perform later in the game. Want to carry more weapons? Be strong. Want to sparkle in those oh-so-important soirees out in the wasteland? Be charismatic.

Nine years on. It's your birthday. Your father has grey hair. This bit's all about learning to speak to people and make choices. Your birthday cake's hacked up by a robot and you get bullied by Butch, some snotty kid. The responses you choose affect how people view you, obviously, and it's in this section that Bethesda's interpretation of the setting itself shows some humour. The cake-cutting robot is dumb and comical. A dot matrix LED sign on the wall flashes, "We're all in this together." An old woman you speak to makes us laugh out loud. Nice touches.

Your tenth birthday present is a Pip-Boy 3000, a PDA that handles pretty much everything as you move forward, from equipping weapons and armour to allocating stimpacks, managing quests and handling inventory.

You're 16. James leaves the Vault, and you follow, out into the nuclear desolation of Washington DC. This is the plot, and we're not shown how this pans out. The next thing we see is a dog-lover getting wasted in a scrapyard.

Every dog has its day

Yes, it's Dogmeat, the dog from the original Fallout. You "acquire" him after his owner gets killed. Dogmeat can go looking for food, ammo weapons: whatever. Don't look after him and he gets shot and stays dead. Story-wise, it doesn't actually matter if he dies, apart from the fact that you're left without a dog.

Hines also told us that your can have a human companion in the game if you're charismatic enough, but didn't elaborate.

A quick note. The outdoor environments are beautiful. It's pretty obvious from the screens, but it really is a fantastic sight running in HD. We were shown the game running on a 360, but Hines said all three versions will look identical in the end.

The Dogmeat encounter is our first look at combat, but Hines goes into depth on the game's action elements in the next section, a "dungeon" in the form of a disused office block.

Combat in Fallout 3 works like this, as far as we saw. It can be played as a third- or first-person shooter, and Hines mentioned melee weapons, although we only saw guns. There's a reticle on the screen at all times. You move into rooms, down corridors, and so on and encounter bad guys, in this case ghouls. You can aim at any body part and it'll have a sensible effect, so if you want to stop someone moving, shoot their legs. If you want to stop someone holding a weapon, shoot their arm. If you want to stop someone breathing, shoot them in the face. Obvious stuff.

VATS ze matter wiz you?

The difference is the Vault-Tech Assisted Targeting System (VATS) system. It works like this. You're plugging away at the odd ghoul in real-time when all of a sudden you run into four of them, and this lot's glowing (glowing equals bad in Fallout). This is probably a good time to drop into VATS mode.

You press a button and the action stops. Each targetable enemy is now broken down into selectable body parts, each with a percentage attribute next to it. You can flick between each body section and queue up combat commands. So, you might select two headshots and two leg shots on our ghoul friends here, with the percentage figure the chance of the shot hitting.

The commands are stacked up in the bottom right of the screen, and for each action you select your VATS points – in a bar under the command stack - are reduced. Once they're gone, no more actions. All you do then is hit a button and the game enacts the commands for you, with dramatic camera angles showing off the action in the best light.

As soon as the actions are completed, you're back into real-time and your VATS points gradually increase again.

As Hines explained, there are several benefits to the VATS system.

Firstly, it means you can play the game exactly as you want to play it. If you're more of an RPG person, you may want to err on the side of stats and will do a lot of the combat in VATS. If you're a shooter fan, you may not use it at all. The choice is yours. We pointed out that the system is big on numbers, percentages, and so on, and is likely to be a bit heavy for the "general" player. Without skipping a beat, Hines answered that no one has to use it. Want to blast away in real-time? No worries.

Secondly, VATS is the "bridge" mechanic between shooter and RPG. Traditional RPG conventions permeate the entire game, but it's still a 3D shooter. Bethesda needed a way to bring turned-based combat to the modern real-time shooter, and VATS was the answer. It's unique: we've certainly never seen anything like it.

It must have been very challenging to beat that specific problem, we say. That'as why we've been working on it since 2004, says Hines.

Lastly, VATS adds a hugely enticing layer of depth. Hines gave an example. You've just been in a firefight and you've taken a kicking. You fix yourself with stimpacks – administered through the Pip-Boy 3000 to any body part you wish – then walk round a corner to find yourself facing another team of enemies. Instead of just blasting away, you drop into VATS and stop the action.

This isn't just to take a breather. Now you're in VATS mode you can assess what you're facing, the strength of the enemies, where they are in relation to you, and so on. You can be tactical without the "twitch". VATS makes Fallout 3 a game for everyone.

When fat men are good

The last section we see is in open ground in a trench system used in a war between Super Mutants and the Brotherhood of Steel. Suffice it to say, that when Fallout 3's action is at full tilt, it's incredibly impressive. The demo ends with Hines throwing tactical nukes – the Fat Man gun - at Super Mutants hidden behind a barricade. By this point we're practically drowning in dribble, so we're pretty much done.

Hines answers all our questions about platform differences, DLC, Dogmeat, system spec for PC, random encounters and FPS targets before telling us that the next time we see Fallout 3, it'll be playable. Yep, the E3 build will be hands-on.

Fallout 3's been stamped "game of the year" with good reason. The moniker's subjective, obviously, but there's no doubt that Bethesda's RPG is up there with the likes of GTA IV and Gears of War 2 as one of the most anticipated of 2008. Now we've had a chance to see why, there really isn't much more we're looking forward to playing.

Fallout 3 hits 360, PS3 and PC this autumn.