New "Project Natal" Makes Xbox 360 Owners "The Controller."

Just announced at Microsoft's E3 press conference is a new 3D camera which makes the player the controller.

How does work?

The camera - named Natal - uses a three-dimensional camera which track the players movement and responding accordingly to on-screen feedback.

A video displayed the various ways in which Natal will "change" interactive entertainment such as using your hands to steer an imaginary steering wheel in racing game or virtually fighting an opponent with real life actions.

Xbox 360 developers look to hopefully simplify the Nintendo Wii's motion sensor remote by removing any necessary buttons and relying on body movement as well as facial and voice recognition.

The Xbox Live Dashboard was controlled on-stage via hand movements and a virtual painting was constructed on the stage without the use of a controller.

However, what was possibly most impressive was Natal's usage with a virtual simulation of a young boy called Milo.

Introduced and explained by "Fable 2" creator, Milo interacted with a demonstrator in a video where they carried on a conversation and Milo reacted with an emotional response depending on the question. Also, the demonstrator drew a physical drawing and showed it to the camera of Natal where Milo interacted with a digital replication of the image on screen.

This new technology, if properly implemented and utilized could prove to a revolutionary step forward for the industry - baring that gamers want a physical experience where a lofty amount of space is required to use the new camera.

Look for more information on Natal as well as podcast commentary on Microsoft's showing on VGF as E3 '09 continues.