Microsoft and Lionhead have teamed up to bring Xbox 360 users the first chapter of Fable II: Game Episodes… for free. Phil Spencer of Microsoft Game Studios hopes that this move will lure in gamers who may have been hesitant to buy the original release. The stand alone game is available on Xbox Live as of today. Many users are reporting that it basically amounts to an “extended demo”, however it’s nice to see more than the typical half-assed demos currently flooding the Xbox Live Marketplace.

The game is going to be distributed in five installments, and completely compatible with both DLC packs (”Knothole Island” and “See the Future“), as well as all the achievements you may have already unlocked.

Who knows? This could be a sign of good things to come. Imagine Valve releasing Half Life 2 for free, in hopes that you buy all the episodes (speaking of which, where the hell is Episode Three?). From a marketing standpoint, it could be a profitable move, making the strategy a win-win for both consumers and developers.