One thing we noticed immediately about the Dungeon Siege 3 E3 2010 demo was the graphics. Obsidian created an all new in-house graphics engine (the Onyx engine for those of you keeping score at home) for this game and it looks gorgeous with some impressive looking visual effects for combat and magic abilities as well as character models and animation. Like the first two games in the series, Dungeon Siege III will have no loading times. That means gamers can expect a seemless gameplay experience with no interruptions.

One other difference is that there will be two ways to view the hacking and slashing action in the game. You could choose to view the game in the more traditional action-RPG top down viewpoint or you can switch over to an over-the-shoulder camera where things really get more intense in the various battles.

The E3 2010 demo showed two of the game's character classes, the big brawler-like Guardian class and the magic-based Archon class (Obsidian isn't talking about the game's other character classes yet). The gameplay looks like a Dungeon Siege design; it's all action, killing and looting in the fantasy land of Ehb. Fans of the first game in the series will be happy to know that the lead character in the first game, The Farmer, makes a (sort of) cameo in the third game. The demo showed the two characters above ground batting various enemies including massive spiders, skeletons and a weird mix of half humanoid and half deep sea fish. Of course players can expect to collect lots of phat loot after battles and there's also some stuff to be gathered if you shatter a few containers along the way.

The game demo moved into the dungeons in the second half of the demo as we got to see a brief look at Dungeon Siege III's co-op support. One development signed into the game and took over the other character in the duo and then a few minutes later left again giving the remaining player an AI character. It's clear that this game will support on the fly co-op with players able to drop in and out anytime they want.

The final part of the demo, naturally, has a boss battle as the two character took on a massive monster that was heavily armored and could move in short but very fast bursts of speed and summon some minions for reinforcement . Our two heroes-gold horders had to slowly cut down the monster's armor to then make any damage on the creature itself. Naturally this will be just one of many boss battles to come in the full version.

Obsidian isn't talking much about things like how the game will handle character inventories or skill progression. We tried to get the reps to talk about PC specific features like DirectX 11 graphics support or editor/mod support (Gas Powered's previous Dungeon Siege titles were very mod friendly) but unfortunately we were not able to get a clear answer from the Obsidian reps about such support.

Quite frankly, Obsidian's track record in making games is hit or miss with us but at the moment we are very encouraged with what we saw at the Dungeon Siege III E3 2010 demo. The game looks like it will keep what made the first two titles so addictive to play and it will do so under an all new graphics engine that makes the various battles and loot taking pretty to look at. We hope to learn more about this third installment before the game is officially released sometime in 2011.