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Autoblog visited the official unveiling of Forza Motorsport 3, Microsoft's latest racing title for the XBox, at the E3 expo. With graphics playing on numerous flat screens that, to borrow the phrase, moved the game on, and with the backing of an Audi partnership and a gleaming red R8 V10 on a plinth among the crowd, everyone involved was bullish enough on FM3 to make an actual bull think "Better watch out for those guys..." In fact, said Dan Greenwalt, the lead developer at Microsoft's Turn 10 Studios, said "We already made the best racing game the last time, with Forza Motorsport 2." Forza Motorsport 3, he said, signaled that "We were out to make the best game." Follow the jump for the story.

Racing sims really boil down to two titles: Gran Turismo and Forza Motorsport. GT is on its fifth iteration, Forza is introducing the world to its third. Even though there are two generations supposedly separating the two, Turn 10, with the mighty backing of Microsoft, has scaled the learning curve with a helicopter, not rope and piton. The Turn 10 folks will even tell you that the last version of Forza was outdone by GT4 when it came to graphics – and then they'll add that Forza had physics and damage and rollover and user-generated content and customizing options that GT4 couldn't touch. With this game, having taken an obsessive aim at graphics quality, as well as improving those other areas and adding a few more, Turn 10 believes Forza 3 sets a standard high enough to make gold feel inadequate.

Those efforts were led by Dan Greenwalt, who is not merely the game director at Turn 10 for Forza Motorsport but the guy who invented it and pitched it to Microsoft. "I want to turn car lovers into gamers and gamers into car lovers," he says. His way of doing that is by creating multiple outlets for people to develop emotional attachments to the cars on screen and allowing them to approach that in whatever way suits people best, and then connect them all in a car-crazed community.

With the last game's driving realism and online driving possibilities, as well as the artist auctions, "We did a good job of turning drivers and artists into heroes with the last game," said Greenwalt. "Now we want to turn tuners into heroes."

Just like there are individuals and groups whose only interaction with Forza is to create custom paint jobs, now for tuners there are more upgrades on offer and tuner files can be downloaded. If you want your Ford GT optimized for Laguna Seca, you can hop on Xbox Live and download the file that will turn your car into a Corkscrew killer. If you want to turn your Honda into a Ferrari, there's a tuner out there that can do that, who knows how to reinforce the chassis and change every number and part necessary to go from red "H" to black horse. "You have to know tuning," Greenwalt said, "but we want to call those guys out as the best tuners."

Knowing that such a community will probably only form around something substantive, Greenwalt's team worked to make Forza a gasp-worthy affair. "Forza 2 had a 360 frames-per-second (FPS) physics update engine and 60 FPS graphics," he said, "and we modeled the way tires and the gasses inside them heat up and affect driving." With Forza 3, the challenge was going further than that. "In Forza 3 we modeled tire and sidewall flexing and the effect on driving dynamics."

Turn 10 also availed itself of one of the world's heavyweights in the arena of car technology. McLaren F1 makes a standardized electronics component for all the cars on the F1 grid called the black box. Microsoft is associated with McLaren in the development of that black box software, and that led to Greenwalt going to McLaren's Technology Center and crunching numbers on the same aero simulator built for McLaren F1 driver Lewis Hamilton. Even though there are no F1 cars in Forza 3, the lessons Greenwalt learned about aerodynamics in one of its highest temples have been used to improve the gameplay for the guy in Topeka. "We learned things about aero that mean you get a multimillion dollar simulator for $60."

Still, he admitted, "Eventually you run out of things to simulate."

The game isn't only for driving masters, though. Knowing that some players would want to be able to pick up a controller and just have a good time, features were added to the game to make it possible for a huge range of ages and abilities to enjoy themselves. On/off switchable aids include ABS and traction control, a green racing line laid on the track so you "know" how to drive, and auto braking that slows the car for you through turns. There's also a do-over function: if you're way too hot into the last corner for a last gasp pass and end up on your head, you can hit the do-over button and the race will rewind itself five seconds. If you think you messed up the last few corners, you can hit the button three more times and go back up to 20 seconds to correct the errors of your ways.

And when you just want to have fun and show off, there are leaderboards, and you can tape your winning lap around any track – up to 8 drivers at a time can even do simultaneous stunt driving – and upload your wheeled prowess to XBox Live for all to enjoy.

After covering the basics, the skillsets, and the hooning, what was left? Graphics. Beyond the simulation of physics is the simulation of the physical vehicle, now a headlining event in Forza 3. While Audi's R8 V10 is the marquee car and Turn 10 had near total access in order to recreate it, the dedication to verisimilitude runs throughout. It was said that 9,000 data points were used to model the vehicles. The Audi R8 V10 car, in real life, has twelve vents running down both side of the engine cover, together representing the 24 Hours of Le Mans. The engine centerline is slightly to the left of the centerline of the car in order to package the quattro system most efficiently. The car's two inboard headlights are bracketed by curved bits of metal that take their inspiration from the sail forms of the Sydney Opera House. The LED strips underneath the headlights each have 24 LEDs in them, also in celebration of Le Mans. The dash information display contains a lap timing function that can display three laps at a time. The car's top speed is 196 mph.

All of those features have been recreated on the R8 V10 in the game.

In fact, said Chas Murphy, the product manager for Audi sports cars, "I've had this car on the track. Even the sound of the car coming to the start line and braking is perfectly captured."

And the game contains 399 other cars, all with the same level of detail.

In case you're confused about the Audi involvement (we were), Audi is working with GT5 because its cars are licensed, but Forza 3 represents Audi's only official partnership. With Turn 10's interest in taking this game to ever more massive masses, after speaking to a number of potential partners they hitched up with Audi because of the German company's genuine motorports heritage, fans, and passion. Said Brad Stertz with Audi PR, "Being detail oriented is also a brand alignment" between Audi and Forza, and "we're both challengers, so there's a hunger with both brands."

And Audi plans to make big music with the association. A contest has already been held to decide three teams of Forza 3 players who would compete in an actual 24-hour race at the Audi Forum in New York City to coincide with The 24 Hours of Le Mans. Said Younghee Wong, in Audi's experiential marketing department, "There will be 3 teams of three just like the real race, they start at the same time as Le Mans, 9 am New York time, and they can't do more than quadruple stints [1 stint = 1 hour]. We're bringing an R10 race car to the Forum and Audi Sport North America will demonstrate a pit stop and how to do a tire change. There will even be a room to sleep in. The winning team goes to the 2010 Le Mans with Audi."

And if you're a Forza fan, word is there'll be other incentives coming from now through to October, when the game is officially launched.

Is all of this enough to make Forza Motorsport 3 the bees knees? Not having played it (yet!), we don't know. But the philosophy behind it and the look of it on screen is all most encouraging. Showing his console and game competitor due deference, Greenwalt allowed, "I have full respect for GT. Playing that game is what got me into this business." Still, as far as he was concerned, he had already crossed the finish line first – not least because GT5 is still, literally, waiting to finish. "Compared to GT our physics are better, our graphics are now as good, we have more cars, we have damage, rollover, and user generated content. No racing game can beat it."

If what he says is true, it could be good that the game is coming out in Q4 – you'll need the holiday breaks to get your playing fix in. And Greenwalt knows it. "My goal," he said, "is to ruin work days."

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