As I briefly outlined in a previous blog, the basic idea behind Fade will be an expanding variable engine. Without providing specifics on plot or setting the idea is to create a dynamic environment that is different every time you play. As asdfjkl pointed out to me Resident Evil: Outbreak will utilize a similar idea in its gameplay, although it is more basic due to its linearity.
Ideally Fade would be unique every time you start a new game. This would include level layouts to some degree, as well as item placement and character development. The concept here is to change the game every time you play by providing enough variables that the chances of ever having the same conditions are virtually impossible. Examples of this would be a random character appearance. More specifically your character would be unique every time. Want a male protagonist in his late 40's? You might just get it, or possibly even a teenage girl next time. The variable setting would make each game unique to the extreme. You may want to find a mirror in the game just to check out your new look every game.
Of course the possibilities are limited by the number variables included, but by using enough variations you would be able to maximize the differences allowed. Although it would be nice to have a randomly generated level, this may not work due to certain variables. Instead a random level order can be used to progress the game depending on what items/information has been found by your character. This means that certain levels may or may not be used in a given game. So provided that there are 12 total levels, you may only need to play through 8 in order to complete the provided story.
As for the story, it will be generated via the available items. A generic plot that I had constructed involved a person with amnesia trying to uncover their past. In this manner the items/information found would trigger memory sequences which provide clues towards your next goal. As the goal will be random the chain of events will play out differently each time. Also note that there may be possible paths to the end within a given game, so you can even have alternate endings in the same game. Whenever a memory segment is gained it would be shown via a snipet of a black and white cutscene. Once the memory is complete (all the segments are found) the full cutscene would be shown in color. This would then complete the given level.
As for the level layout it would be ideal to allow the player to backtrack across areas that they have already explored. The trick here is to provide new areas without streamlining the player along these paths, think Grand Theft Auto. I'm still unsure about how to handle navigation hints, but I'm thinking that flashbacks may be a possible way to accomplish this task. An example is that you walk into or near a given area and trigger a memory segment that will clue you in to your next goal. A memory management system would be needed in order to keep track of the goals in order to prevent them from overlapping, but that is more a gameplay mechanic.
In the end, Fade would be an incredibly intricate and detailed game with almost limitless gaming possibilities. Sure this game would be insanely hard to script and code but hopefully we will see more games that utilize random variables in the future. With any luck Fable will be similar to this genre.