The game uses a full physics engine, an aspect not included in Team Ico's previous games. The name of the creature, Trico, can be taken to mean 'prisoner', 'baby bird', or a portmanteau of 'bird' and 'cat' The team wanted to avoid making the animal 'cute' and instead focus on achieving realistic-looking behavior with 'animal-like expressions'. The final creature is an amalgam of several different creatures and the approximation of their behavior within the limitation of the game's engine the design was 'deliberately unbalanced because looking strange was important here', according to Ueda. Ueda also wanted to create a virtual creature that behaved as realistically as possible, avoiding 'the unnatural idiosyncrasies of the virtual animal' that normally appear when virtual animals are attempted. Ueda desired to make this interaction and relation more of the central concept for the next game. The creation of The Last Guardian was partially based on the interaction between the player and the horse Agro in Shadow of the Colossus. The player controls the unnamed boy who can run, jump, climb, and perform other actions similar to the gameplay in Ico and Shadow of the Colossus. The Last Guardian is a third-person perspective game that combines action-adventure and puzzle elements. The game revolves around the developing friendship between a boy and Trico, a giant, feathered creature resembling a griffin.

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