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The Diablo experience can best be summed up as, "Click monsters until they fall over and loot drops out." There wasn't much room for story in this model for the first two games. The series' lore, though rich, was mostly confined to cutscenes or long speeches by aging monk Deckard Cain. However, the beta for Diablo 3 demonstrates that Blizzard has made story a much higher priority this time around.
The beta takes place in and around New Tristram, a town built on the ruins of the village from the first Diablo. Much like its predecessor, New Tristram is beset by demons and the walking dead. However, Blizzard does a better job of depicting the town's plight. At the start of the beta, I had to help the guards fight back a horde of zombies. Once inside New Tristram, I found several villagers willing to indulge in (brief) conversation about the area and their problems. In the first two games, the towns felt like they existed in a different dimension than the monster-filled countryside and dungeons but here the game feels like one coherent world.
Also, the characters in town don't just sit around while you run around saving the world. Okay, most do but there are some notable exceptions. Early on, I came across a grieving blacksmith. His wife was turning into a zombie so he locked her in his cellar along with the other infected. He and I went down into the cellar together to finish off these poor souls and put them out of their misery.
Instead of merely hiring mercenary companions in town, you must find them. While battling my way through a ruined cathedral, I found a templar being held prisoner by cultists. After rescuing him from their clutches and helping him kill his corrupted former comrade, he decided to accompany me on my adventure.
In spite of the fact that his name is simply "Templar," I grew attached to my new companion. He and my character traded banter while exploring the dungeon. It kept me from falling into a "click-loot-repeat" trance and also provided some insight into both of the characters' backgrounds and personalities. Being able to equip him with new gear and choose his ability upgrades deepened the bond a bit more, I think. He was a full-fledged sidekick rather than a friendly bot.
The last boss of the beta is the Skeleton King, the reanimated corpse of King Leoric. He was actually in the first Diablo as well. Most people playing that game probably had no idea of his story significance, though; to them, he was a big skeleton that dropped some sweet loot.
D3, however, properly introduces the Skeleton King to players. Sprinkled throughout the Act I dungeons are journals from Leoric and his former knight. I didn't have to take a break from adventuring to read them. These journals are "audio logs," read aloud by the character who scribed them. I learned about Leoric's descent into madness bit by bit while hacking and slashing my way through hordes of monsters.
Shortly before confronting the Skeleton King, I found his old sword. Upon touching it, ghosts appeared and acted out the final moments before his death. The King turned out to be a push-over (he's the first boss in the game, I believe) but knowing his story and his significance in the game world gave the victory more weight.
The tireless search for loot is the engine that drives Diablo games and Diablo 3 won't change that. However, players looking for a story-driven experience will be satisfied here. Blizzard manages to tell a story without compromising the fast-paced action that put the series on the map.