It's not just a camera, either. It is also capable of voice and facial recognition, and resembles the Wii sensor bar, and will be compatible with every Xbox 360 ever sold.
The conference featured a video showcasing various people using the controller, such as a family steering a controller from the couch by leaning, people kicking imaginary soccer balls and a boy jumping on an imaginary skateboard. Menus can even be navigated with hand gestures.
Microsoft boss Don Mattrick and Hollywood director Steven Spielberg unveiled the new control scheme, with Mattrick stating that "It's not about reinventing the wheel, it's about no wheel at all."
Kudo Tsunoda, the Project Leader for Natal, demonstrated the device's abilities with Ricochet, a tech demo using the Unreal Engine 3, and a paint-type game. All mentions he made were replicated by his on-screen avatar.
According to Microsoft, Natal is the first device to combine an RGB camera, depth sensor, multi-array microphone and custom processor into one tiny little package, allowing it to fully track player movement in 3D. Impressive.
"The next step in interactive entertainment is to make the controller disappear," said Spielberg. "With Project Natal, we’ll see games that bring everyone together through technology that actually recognizes us."
As of yet, no specific games have been confirmed. Both Spielberg and Molyneux confirmed that they had teams working on some software, but with most developers having not yet received a development kit, it might be a while before we are enjoying Project Natal in our homes.
More details as they surface.

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