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I attempted at first to install the games for windows live services program without windows 7 compatibility mode, and the game did not work.
The only way that I could personally get the game to work is by doing what I have written.
I use Windows 10 64bit.
Now, as I said, some games work, some do not, there is even an official list you can find through the power of the google.
Now, you might not like it, but this works.
You can call it magic, you can call it time traveling, I do not really care what you call it, but I have confirmed that it works.
Others have confirmed that it works.
The only person who doesn't confirm that it works, is you, this highly suggests that you are doing something wrong, and I am going to be quite honest here, considering you are arguind that you do not need to be in compatibility mode to run the game, this seems very likely to be where you are wrong, I can't confirm that, but it seems highly likely to me at least.
Also, you are extremely wrong about the xbox live servers being shut down, it is an app used by windows 10, it is still very much active, hell it is also the servers used by the Xbox One and Xbox One X.
To get it, you open the Microsoft Store, you type Xbox, you download Xbox, and you log in.
Congratulations, you are now on the Xbox Live servers, this is the official name used on microsoft.com.
https://www.pcgamer.com/games-for-windows-live-may-shut-down-next-year/ http://www.ign.com/articles/2013/08/19/games-for-windows-live-shutting-down-in-2014 https://en.wikipedia.org/wiki/Games_for_Windows_%E2%80%93_Live
here is evidence for the xbox servers being shut down as well
https://gamefaqs.gamespot.com/boards/971431-fable-iii/56982741
https://www.youtube.com/watch?v=g7CAfOhpfOM
this evidence should be enough for anybody. totally innocent chatbot is also stalking me here on the steam forums.
https://imgur.com/a/s2VNXao
As I said before, yes, the service was shut down, this still works.
I've lost everything else I wrote and quite frankly, can't be assed to re-write it.
From my understanding however, DLC does not work, I have not gotten far enough to verify if it works or doesn't work, but as far as I know at least, the only way to get the DLC to work is to crack the game due to all of the Windows Live Marketplace servers being shut down forever.
And yes, I censored my name as well as the names of my friends, I don't particularly feel like getting stalked over this.
https://imgur.com/a/0J1Z8vi
Bonus, I included the ♥♥♥♥♥♥♥♥ xbox screen that you claim does not exist any more even though you can easily verify that it does by opening the windows store and typing xbox and then downloading and open it.
My experience with it was this: after six months of not touching any GFWL games, I tried running some of them and they all gave a connection error. After some troubleshooting, doing the two steps below helped me. Step 1 is identical to your guide and Step 2 might be specific to WIndows 8.1. So here they are:
1. Reinstalling gfwl (as you described). However, this gave me a "need to install windows live sign-in assistant" dialogue.
2. Installing windows live sign-in assistant from THIS link: https://www.microsoft.com/en-us/download/details.aspx?id=26686. The GFWL installed itself for some reason links to version 6.5 of that (available here: https://www.microsoft.com/en-us/download/details.aspx?id=26686), but it's NOT the correct version.
2a. Running a GFWL game after those steps downloads a GFWL patch inside the GFWL client within the game itself. It 's smooth sailing from that point on.
I didn't actually need to run Fable III w/ Windows 7 compatibility – that appears to be unnecessary at least if you're using Windows 8.1. I did use Win7 compatibility for the installers, but I'm not sure if that is strictly necessary
Instead, they shut down GFWL Marketplace – the Steam-like storefront with a separate client and some exclusive games even. For this reason you can't download the DLC in Fable III even if you bought them (it'll say that you own them and you'll be able to check that, but you won't be able to actually download anything).
The achievements still work however, and so does the multiplayer for some reason. It'd reasonable to assume the servers would be switched off by now – but maybe the game just has P2P architecture or maybe it uses some sort of centralised Xbox servers.
https://youtu.be/G20DvS01eKM