He was at GDC to talk about Fable 2 which looks really good. Sort of like Oblivion but more so. And you get a dog.
And your friends can join you on quests.
At one point he mentioned that the best games force you to make choices and then live with the consequences of your decisions.
In Fable 2 the nastier you are the nastier you appear in the game. Which seems a bit unfair on ugly people who are actually nice folks, but there you go. Perhaps I am over simplifying again.
Anyhoo, in the course of the discussion he mentioned that according to research, only around 5% of players choose to take "the dark side" in games like this.
Most players prefer to reach their goals using wholesome means. Peter saw this as something of a wasted opportunity for gamers, in that the game maker still has to create all the scenarios and dialogue for the naughty actions and so you are not playing the game to the full until you have experienced it as a villain.
I saw this as quite a hopeful sign, in that, perhaps humanity has a natural tendency to be nice when given the choice. Or perhaps it only applies to video game players (or at least 19 out of 20 of them).