By Darren Waters Technology editor, BBC News website, in San Francisco

But the man behind Populous, Black and White and the three-million selling Fable says he has failed as a designer because he has not been able to attract a wider audience to gaming.

That failure, he says, has sparked his passion to see the problem solved.

"It's a failure borne out of myself as a games designer and creator and indeed the wider games industry.

"For making games that only appeal to a small part of world. The number of people playing games is going up, but it's going up slowly.

"The number of people who could potentially be playing games is huge."

Free play

Molyneux is ideally placed to give an overview of the industry, and not just because he is speaking to me from the 20th floor of the Nikko hotel in San Francisco.

He is among a handful of game designers who has been working in the industry for more than 20 years and someone who has always pioneered new forms of gaming.

What is combat all about? It's about feeling good; it's about feeling heroic Peter Molyneux

Populous, released in 1987, spawned the god game genre, giving players the role of a deity, building a whole world and shepherding entire populations.

Over two decades Molyneux has been focused on giving players freedom, sometimes seemingly limitless freedom. In a very real sense he has created environments in which gamers can create their own worlds.

But, he says, his games have had a fundamental flaw.

"For a long time I made games I mistook adding complexity for being a good thing," he says.

"In actual fact I kept adding new features and new features to a game when I should have been fixing something deep down in the guts of the game that was slightly wrong."

Molyneux is famous for adding features and for layering on options and opportunities for gamers.

"What I feel more and more as I get more and more experienced is that if I can make something really simple, give gamers a highly-polished experience, then I have succeeded.

"A lot of the time it is making things simpler but much, much richer."

Top challenge

Fable, released in 2004, was Molyneux's first role playing game (RPG) and his ambition going into the game was simple.

Fable 2 is a role playing game on Xbox 360

"I want to make the best RPG ever," he said at the time. The game sold many millions of copies but Molyneux has admitted that the game did not match his ambitions.

He and his team at Lionhead Studios are now working on a much-anticipated sequel.

And this time his ambitions are no less far reaching.

"I hope those who enjoy the game rate it in their top three games of all time.

"That's pretty ambitious. In fact, being ambitious, if I asked anybody they would say that Fable 2 featured as their number one game."

To reach his ambitions Molyneux has spent a long time tackling two key issues: how to make people care about the game and how to make it rich and deep enough to satisfy hardcore gamers and simple enough to attract new players.

What it comes down to is making this one of the greatest stories computer games have ever told Peter Molyneux

"I want people to sit down and play the game with a friend. Now sometimes your friend could be a gamer. But probably more likely your friend is going to be someone who has never played the game before.

"Both of you should feel good about what you are doing, neither of you should feel stupid about what you are doing."

To that end Fable 2 has a simplified one-button combat system for new gamers and offers hardened gamers combined button action.

"What is combat all about? It's about feeling good; it's about feeling heroic," he says.

The game will also let friends who are playing the game online around the world jump into each other's Fable 2 world and play together.

"That's really, really important to me and the important thing about the games I am creating is if you share something with somebody, and if you both share something positive together, it's a much better experience," says Molyneux.

Love story

He says the company has spent a long time thinking about how to make gamers care about the game, the story and playing.

Players will be free to roam the digital world

"What it comes down to is making this one of the greatest stories computer games have ever told.

"And the trick we are going to use isn't to get some amazing script writer, although we have a cool script writer, or to tell some story that has never been told.

"We are going to get characters inside the game of Fable to really, really like and love you."

Molyneux adds: "If they start caring about you, it's human nature you'll start caring about them. And as soon as you do that, I've got you."

In Fable 2 the character you create, through your experiences, can fall in love, get married, have children.

"If I wrap a story around the things you care about, it becomes a compulsive story," he says.

With such high ambitions and epic scope for the game, does Molyneux feel under pressure to deliver on his promises?

"I am the luckiest man alive because I get to have my dreams made real by 150 of the most brilliant people."