Daniel Vavra has a magnificent beard and a DayZ T-shirt. He's squashed in a window on my screen, his image beamed direct from from his Warhorse studio in Prague. In another window is streamed a live demo of his new game Kingdom Come: Deliverance. Remember that next-gen medieval role-playing game with no fantasy that so captured people's attention in December? This is it. And it's beautiful.

This is 15th Century Eastern Europe recreated to a tee. Imagine a warm summer's day in the countryside, the haze from the dust, the dappled sunlight through a forest's trees, the mud tracks furrowed by ploughs. I'm seeing it now. Wattle and daub houses seem to sag in the heat, fences are twisted, wood is weathered, stones have crumbled. It's a living museum, and it's one of the most alluring rural scenes I've ever clapped eyes on.

A more orchestrated video better introduces me to the game. A king has been kidnapped by his own brother and there's unrest in the kingdom. Great catapults loose their heavy loads against hulking fortresses, a thief carefully frees a purse with a knife. An arrow hammers hard into the side of a pig in a forest, a sword is sharpened on a stone, a fist fight breaks out. Then an armoured warrior is scaling the wall of a keep on a ladder, there's a clang of swords, and then a commander gallops across a battlefield, rousing an army for the charge. Who needs fantasy?

This is CryEngine, and the product of 18 months hard work by 20 people. In US game development terms, around $3m has already been spent. And many more people and much more money will be needed to realise this, the "dream project" of Daniel Vavra's mind. He walked away from the Mafia series - from being director of the Mafia series - for this, and he's aiming high. "We are mixing the freedom and mechanics of Skyrim, the setting of Mount & Blade, the storytelling of The Witcher and the tough combat mechanics of Dark Souls all into a single, hopefully gorgeous, package," he grins.

That's on PC and probably PS4 and Xbox One, with a target Q4 2015 release date.

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He's living in cloud cuckoo land! That's what I thought, because when I wrote about the game in December, the story was how it couldn't find a publisher. Warhorse pitched and pitched and turned up nothing. Publishers were "scared", says Vavra, biting their nails waiting for confirmation that PS4 and Xbox One would sell. So what could he do - waste more time pitching?

That's when I expect him to say "Kickstarter", but instead he says he's self-publishing the game. You see, there's a very wealthy private investor who's willing to put forward all the money for the game. "But our investor would like... well, he's from outside the industry, so when the publishers were a little reluctant and afraid this was a niche market and not many people would be interested... It's very risky. We have to make a deal with the investor that we will prove to him somehow that the game is going to be accepted by people, or they are willing to buy it."

That's when he says "Kickstarter".

"We agreed that we will go to Kickstarter to raise very small amount compared to the whole budget of the game. We will ask for ... about £300,000, and if we raise such money, the investor will then finance the rest of development himself, and we will self-publish the game.

"It's the only way we can make the game happen, probably, and since our DayZ friends are doing quite well I hope it's also the best way, because to be independent is much better than to be responsible to some foreign company that has some different plans. It's much easier for us as a developer to do what we actually want."

That Kickstarter campaign is live now. (Update: It's a success! Kingdom Come: Deliverance raised £300,000 in a day and a half. How much more can it make?)

"We have to make a deal with the investor that we will prove to him somehow that the game is going to be accepted" Daniel Vavra

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An investor who's good for "a multiplication of the amount currently spent" is one thing: an unproven studio delivering on a promise like Kingdom Come's is another. I'm incredibly sceptical. Wisely, however, Vavra and Warhorse have decided to carve the game up. The way the story worked was through three chapters in three different parts of the world, so breaking them apart suited both development and design.

"We will split the chapters into separate releases for a smaller price, and release them as close to each other - six-to-eight months - as possible," Vavra says. One will take place in a big city, another in an open-world countryside, with various castles and villages, and another in a smaller locale Vavra didn't detail. Each will have its own climactic story arc. "The first chapter," he says, "is one-third the size of Skyrim in terms of hours of gameplay." That's roughly 30 hours. And by the time you're bored of that, the second chapter should be out.

On top of that, Warhorse plans to release playable builds to backers of smaller levels of the game, to showcase and test core mechanics. Then, "Early Access full game release on as many platforms as possible - we still don't know how the console market will work so we can't promise anything here."

The console conundrum Getting Kingdom Come: Deliverance on PS4 and Xbox One is the plan. Self-publishing seems like a go, but the sticking point is Early Access. "So far both manufacturers seem to like indie developers, but their programmes are still not ... Microsoft still did not place the cards on the table fully, so it's still a little bit unknown. Sony is trying to act as an indie-friendly platform but still we are not sure if it's possible to release an Early Access game. It probably will definitely be possible to self-publish in their digital market so this is probably something we will be able to do, but let's see how Early Access will work. "In the end we are totally able, thanks to CryEngine, to port it to any platform. It's much easier than before. It would be a problem on PlayStation 3 probably - PC and PS3 version would be very different. But right now what you see is perfectly capable of running on consoles."

Skyrim, the great open-world RPG benchmark, was made by 70-90 people, not an army, and Vavra plans to hire more than 60. There's experience there, too - veterans of ArmA, Mafia and Operation Flashpoint, as well as the lead artist of Crysis 3 and lead programmer of Forza Horizon.

Vavra's opted for a realistic nine-square-kilometre world, whereas Skyrim measures nearly 40. "Our aim is not to have the amount of quantity but rather quality," he says, generalising that Skyrim has something like 200 dungeons but his game will have 10 to 15. "But they will be unique - something interesting will happen in them. They will all be hand-made, not generated from pieces."

Tools two years in the making will fill the world. "It's like Lego: you can build a lot of combinations and we have all the pieces prepared." If what I see has been created by 20 people, I can't wait to see what 60 can achieve.

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Kingdom Come has strong ideas about game mechanics, and combat is the centre-piece, "something special", if Vavra doesn't say so himself. Swords don't slice through people as if they were ghosts - they crash as physical objects into each other or off armour, and can be wielded with freedom, and you have up to 18 choices of how and where to hit at any one moment, depending on your weapon. You can build combos by parrying at the correct moment and slowing time, then choosing between button prompts appearing on the screen. In action it's fluid, graceful and looks like fun. "It took us more than a year to find out how to do it," Vavra says. "It's something that wasn't possible on current [older] generation [machines] - it's very very hard to develop."

Then there's mounted combat to salivate over, because you will be riding into huge battles alongside others, eventually (presumably) at the head of an army, so it won't be you against everyone else. And when you do charge, your horse will be as invaluable as your sword. "Warhorses were quite interesting animals," he begins, and I'm reminded of the name of the studio. "They were trained to do amazing stuff. Some people still train them this way, and I was very surprised what stuff they can do. They are able to run backwards, strafe side to side, kick to all sides. They can jump in the middle of crowds and kick everyone down." Crucially, he adds, "It's something we definitely want to have in the game."

"Warhorses were quite interesting animals ... they can jump in the middle of crowds and kick everyone down"

To begin with, you're just a blacksmith's son, albeit one whose family has just been murdered by the evil fake-king and his invading army. There are several roles you can play in the world but there are no classes. "You can do anything you want and try to be warrior and thief at the same time," explains Vavra. "If you change clothes, wear something silent and dark, you are a thief. When you do something and you do it right, you are getting better at it."

There are stats, and you will also get tired, hungry and injured. Food can even go bad if kept in your inventory for too long. You'll also gain perks that, for instance, boost your strength with an axe if you're injured, or perhaps you'll choose to be alcohol-resistant for some reason instead. It's quite a lot like Fallout: New Vegas, Vavra summarises.

Characters have a dizzying 20 equipment slots spread across four layers of clothing. Perhaps you'd like a gambeson as your first layer and then chainmail over the top, and then platemail over the top of that. Armours all have strengths and weaknesses - historically correct strengths and weaknesses - so the strongest outfit will probably be a combination of many. Of course you can also piece together non-combat outfits to "impress people and have a better ability to convince them of something". Go on, show a bit of flesh.

You'll be able to craft armour and weapons, and there will be alchemy and other crafting professions as well. And again, Warhorse has strong ideas about how they should be implemented. "We decided that everything you can do as a crafting in the game should be a game - it's not something done in menus by clicking on stuff and pressing OK. If you want to sharpen a sword you need to sharpen the sword in game." In other words: skill-based mini-games. I see a character sharpen an old sword, which involves keeping the stone turning at the correct speed while moving and tilting the blade. Do it wrong and you'll damage it.

"We would like the player to be able to mess with people's lives"

Holding everything together will be a story with cut-scenes, dialogue choices and consequence - a story as brutal and bloody as the period it's based in. In the mission I see, the hero investigates a stable where horses have been hamstrung and killed. After a bit of detective work, he discovers the perpetrators to be terrorists waging a kind of guerilla warfare on his liege lord, but he'll need more than just his sword if he hopes to defeat them.

Cut-scenes will be reserved for climactic moments, with most scenes playing out in-engine, which is good enough. The characters aren't quite up to the quality of the surrounding environments yet, but there's plenty of time and already the lips move convincingly in sync. You'll be able to put pressure on people and intimidate them, but be warned that "you cannot take what you say back". Even "bitching" has its purpose, and may show courage to the right person. There's the potential of romance in the game, too.

"There is a response for everything the player can do, basically," Vavra goes on, and those responses should feel as authentic as the rest of the world. There are punishments for doing bad things in the world, punishments that should stop you doing the inevitable, which is killing everyone in an area and seeing what happens. "In every open world this is a big problem," he grins, and he hopes his "very strong crime system" will keep you in check.

Vavra doesn't, however, want to force you to behave in a certain way. He knows that much of the allure of an open-world can be simply in the messing with it. "We try to do [our world] as bullet-proof as possible; we would like the player to be able to mess with people's lives." Killing a bartender will cause a local drinker to sound the Sheriff's alarm and then go find another pub. He won't run around in a circle until he dies. People in the world will think, engage in activities and routines. "This allows players to experiment with the world, to see what happens if they do something."

"We think books and movies have changed a little bit, that people have grown up ... but most of the games are still in their adolescence, and we would like to change that"

Daniel Vavra sits before me, not as menacing as I had once feared (look at the company picture on the Warhorse website - he's the one with the beard and the bull terrier), wearing that DayZ T-Shirt, reminding me of the growing number of success stories coming from Eastern Europe (and not just Prague). These are cultures that see games and genres in different ways, and build them on different foundations and values. The Witcher series, developed in neighbouring Poland, is celebrated far and wide, and what Kingdom Come: Deliverance now wants to do is show us what it was like to be a knight in medieval Europe, with all the muck and dirt thrown in. And I want to go there.

"We think books and movies have changed a little bit, that people have grown up and heroes have evolved with them." Look at Batman now, Vavra says, or our action heroes or our fantasy fiction. "Everything's more mature, there is more depth to it, more authenticity. But most of the games are still in their adolescence, and we would like to change that."

There's a new wind blowing and it's not from the West, not far from the East. It smells different - it smells exciting.