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In 2002 Sony (NYSE:SNE) brought us the Eyetoy peripheral but failed to capitalise on its potential. At the 2005 Tokyo Game Show, Nintendo (OTCPK:NTDOY) revealed their Wii gesture interface that was probably the biggest ever single step change in video gaming. Now Microsoft (NASDAQ:MSFT), after a long gestation, has taken both these ideas and developed them several steps further for the Xbox 360, adding voice control while they were at it.

If this works as well as portrayed in the video above then it will be little short of revolutionary, the imagination of game designers can take flight in limitless ways. Removing all control input limitations means gaming can go places we would never have dreamed of.

From a hardware point of view the change in abilities that this brings the Xbox 360 are so great that it is almost like they had launched a new console. But the upcoming Xbox 720 will still be on schedule; Moore’s Law (.pdf) and competitive pressure will make this inevitable.

And competitively, if Natal works as advertised, the Wii will be in severe trouble with its main party trick trumped. And the Playstation 3 is looking distinctly old generation with no gesture interface. All this could change over the next 48 hours as Nintendo and Sony make their E3 announcements. We live in interesting times.

Source: Microsoft Takes Gaming Further with Natal