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The game's official web site is now live and letting folks sign up to be considered for the game's beta test. The site also stated Age of Empires Online will be a digital download-only game and is planned for full release in 2011.

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Familiar Age of Empires gameplay
Download and play from almost anywhere
Game continues to evolve over time
Cooperative multiplayer quests and trading
Empire creation and resource management
Historical setting, easy-to-use RTS controls

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In its official press release Microsoft is describing the gameplay of Age of Empires Online as "a living, growing online world, shared with friends and friendly rivals around the globe." Players will begin by controlling the ancient Greeks and guide the civilization to becoming an empire. Players will be able to play the game solo but Microsoft seems to be putting the emphasis on social gameplay with multiplayer missions with friends. Your capital city in the game will apparently change and grow even if you are not playing the title. From the brief press release it sounds like the game will have a "free-to-play" portion but its currently unclear how far that goes.

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What is the capital city? How does it work?
Your capital city serves as your home base and main source of your civilization. Because it lives online, your capital city continues to gather resources and create units even when you aren’t logged in. How you develop your capital city determines your capabilities throughout the rest of the game, and ultimately the direction of your civilization.

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What are quests and how do they work?
Quests are a core part of the Age of Empires Online gameplay, allowing you to display your skills and earn rewards for use in your capital city. Quests make use of the full range of gameplay, including cooperative and single-player missions, and more, allowing you to build your skills and empire through story-driven missions