"It recognizes you, responds to your gestures, listens to your voice, and best of all, it works with every Xbox 360"
Project Natal has been renamed Microsoft Kinect. This highly anticipated project is a new controller device for the Xbox 360 that is not a controller. Yes, it is nothing, yet it is everything. It is nothing in the sense that when you plug this into your Xbox 360, you no longer need to use an actual controller. It will use technology to determine where you are and what you are doing, thus making interacting with the Xbox controller-free.
The Kinect device will sense motion and more. Microsoft gave the example of being able to approach your Xbox and simply state "Xbox, play" and have it ready to play an HD movie or watch a sporting event. If you use a work out game (such as "Your Shape: Fitness Evolved" from Ubisoft), then not only will you be able to work out, but the game will provide real-time precise tracking and tell you exactly how hard you are working out. There will be no cheating because the game will be watching you!
Of course, while you can expect soccer, bowling, dancing, and the standard movement games, the one bit of gaming news that peeks my interest is that Star Wars® will be coming to Kinect from LucasArts in 2011. That's better than knowing that Disney is "sprinkling a little fairy dust on Xbox 360."
As developers, my outstanding question is whether Kinect will be supported by XNA. If so, then that could allow developers to add new dimensions to not only their own Xbox games, but also PC applications. If you know whether XNA will support Kinect, let me know. In the mean time, I'm asking around!