Microsoft’s new motion-sensing device unveiled at its E3 press conference today has no name, no price, no release date and its early-stage technology is of uncertain parentage.

Despite such apparent disadvantages, this bastard child has a kindly foster father and champion in Peter Molyneux, the visionary leader of Microsoft’s Lionhead Studios.

Microsoft’s first demonstrations of the camera, microphone array and depth sensor at the show were reminiscent of Sony’s old EyeToy camera, which could also achieve on-screen feats like painting canvases and hitting balls by waving hands in front of it.

But Mr Molyneux’s demo transcended such impressions. He showed how his studio had worked on exploiting the more sophisticated interactions made possible by the device between players and the characters and worlds created by developers.

Lionhead has come up with a character called Milo (pictured), a highly realistic boy who can recognise the faces, voices and emotions of players. The demo showed how players could hold conversations with him and pass objects into the game and to the character as the device scanned them. They could feel as if they were in the virtual world themselves as they stared at their reflections in a pool and stirred the water with hand movements.

“This is technology that science fiction has not even written about, and this works today,” he said.

“This has been a dream of mine for 20 years…you meet a real character…this is a landmark in computer entertainment.”

In a later demonstration, he told me Lionhead had helped to pull together a number of technologies to create the device, including exploiting work done by Microsoft Research. The peripheral is currently codenamed Project Natal and was given its name by Alex Kipman, Xbox’s director of incubation in Seattle. He is from Brazil and named it after the coastal city there.

However, Microsoft also appears to be using technology similar to that created by ZDV Systems, an Israeli company we wrote about 18 months ago. There are reports that Microsoft bought the private company but Xbox executives refused to comment when I asked them today.

Whatever its parentage, Natal still needs some work judging by the late 2010 launch expected by the industry (Ubisoft today said it was launching its own camera as it could not wait till December 2010). Significantly, other than a pantomime elephant, there were no physical demonstrations of multiplayer games, and lacking that capability might limit its appeal.

Microsoft will hope to sell the device in large numbers to the 30m existing Xbox 360 owners and may well bundle it with new 360s from launch. “This is going to be core to our platform for years to come,” Dennis Durkin, Xbox chief financial officer, told me.

Natal could be a factor in helping Microsoft extend the life of the 360. The other tracks Xbox executives are pursuing are extending it as an entertainment centre and strengthening social networking elements.

High definition video streaming, rather than downloads, will now be possible and even live television will be streamed in a deal with Britain’s Sky TV. Music has been improved with a tie up with its Zune player and one was also announced with the Last.fm music service. Twitter and Facebook were also demonstrated in the 360 interface.

For pictures from Microsoft’s press conference, see Techblog’s Flickr stream . I summarised the announcements in this audioboo.

Tags: Beatles, Eyetoy, Natal, Xbox

June 2, 2009 8:53am in Digital media, Games | Comment