Microsoft unveils Project Natal: No-hands, motion-sensing controller for Xbox 360

At Microsoft's E3 press conference, the company announced Project Natal, its much-rumoured motion-sensing bar for the Xbox 360.

Taking a direct shot at Nintendo Wii users who "sit on the sofa using some kind of pre-set waggle commands", Project Natal -- a code name -- is controller-free, using what looks like a TV-mounted camera/microphone bar to sense motion, sound and even 3D movement, suggesting that the technology involved is far beyond that of products like Sony's PlayStation Eye.

Project Natal will work with all current, past and future versions of the Xbox 360, according to speakers at the press event. Although an exciting announcement, don't get your hopes up too much -- Natal has no official name, price or release date. In fact, it was referred to as a concept for the future.

Microsoft brought legendary director Steven Spielberg out to rave about this future direction for game technology. Spielberg claimed that "people are too intimidated to pick up game controllers" and announced that he's currently working on games for this platform, although no more details were given.

Demoed at the press event were a Breakout-like game called Ricochet, which involves hitting a ball across a room to destroy bricks, and a paint program called Paint Party. Paint Party's gestural vocabulary seems to be stuck in Jackson Pollack Land, but the simple splash-to-paint commands seemed relatively responsive.

Accuracy, however, remains a big question mark. With the Wii, Nintendo was smart enough to include old-fashioned buttons for quick interaction. The iPhone, too, has a quick-response tapping system. Will punches or swipes substitute for button-pressing with the Xbox?

The most captivating moment of the demo was Lionhead Studios and Fable designer Peter Molyneux's creation of Milo, an avatar in a game world who interacted with the player by looking in his or her direction, responding to live conversation, and even accepting hand-drawn messages, scanned into the game and 'transferred' in real-time across the virtual looking glass.

It's compelling stuff, but every part of Natal still seems to be geared to people standing up to play. At some point, sitting on a couch should also be in Microsoft's equation.

Does this mean that E3 2010 will feature a redesigned Xbox 360 packed in with Project Natal? It doesn't seem beyond the realms of possibility.

Check out the video below to see Natal in action.