The paper cites "people familiar with the matter" in its story, reiterating that the camera would sit near a television and capture the motion of players in 3D space.

According to the Journal, Microsoft was developing a motion controller in the vein of Nintendo's Wii remote, but scrapped the plans sometime last year. Microsoft is now purportedly showing the technology to independent game developers to generate interest.

While the camera might be unveiled at this year's E3, the sources say that it likely will not make it to market before the end of the year.