No price was given for the peripheral, which uses a camera and sensor to detect and replicate movements of players' entire bodies. Support is planned for games from Fable 3 to Lionhead's unsettling virtual child Milo, though it's unlikely support will be patched into existing games. Natal can also be used on a Windows PC, Bill Gates has said.

Microsoft also debuted a "behind-the-scenes" look at Natal starring Microsoft figures including researchers and Peter Molyneux, and released the below "fact sheet."

"Project Natal," pronounced "nuh-tall," is a code name for a revolutionary new way to play, no controller required. See a ball? Kick it, hit it, trap it or catch it. Unlike 2-D cameras and controllers, "Project Natal" tracks your full body movement in 3-D, while responding to commands, directions, even a difference of emotion in your voice.

Coming this holiday 2010, "Project Natal" will turn YOU into the controller for games and entertainment, and it will work with every Xbox 360.*

See below for "Project Natal" 101, a list of terms and concepts to help explain this transformation in home entertainment.

"What Is "Project Natal"?

"Project Natal" (pronounced "nuh-tall") is the code name for the new controller-free gaming and entertainment experience from Xbox 360. The name "Project Natal" has several sources. Microsoft Corp. traditionally uses cities as code names. As a result, Alex Kipman, who incubated the project and is from Brazil, chose Natal, a city along the northeastern coast of Brazil, as a tribute to his country. In addition, he knew that Natal also means "to be born" in Latin. Given the new audiences "Project Natal" will bring to Xbox 360, this felt right.

How Will "Project Natal" Change the Way I Play?

• You are the controller. "Project Natal" provides a whole new way to play - no controller required. It uses a sensor to track your body movement and recognize your face, even listen to your voice. If you know how to move your hands, shake your hips, or speak, you and your friends will be able to jump instantly into any "Project Natal" experience.
• Full-body play. "Project Natal" provides a new way to play where you use all parts of your body - head, hands, feet and torso. When you're the controller, you don't just control the superhero, you are the superhero. Full-body tracking allows the "Project Natal" sensor to capture your movement, from head to toe, to give players a full-body gaming experience.
• Personalized play. "Project Natal" provides an in-game experience in which the player's face and voice are recognized. Greet and speak to characters in the game, or simply step into view of the sensor to log into Xbox LIVE and connect with friends. Only "Project Natal" is smart enough to remember voices and faces. Fun has never been so personalized.
• Off-the-couch play. "Project Natal" provides gameplay that gets you off the couch, on your feet and in the fun. Each "Project Natal" experience is designed to get players moving, laughing, cheering and playing together. "Project Natal" makes social gaming off-the-couch fun.
• Easy-to-play fun. "Project Natal" makes sharing in the fun a snap. Talk or watch a movie in the same living room or on the other side of the world - no headset, no keyboard and no controllers required. It's just you, your friends, your family and a whole new way to play.

How Does "Project Natal" Work?

• "Project Natal" sensor. "Project Natal" combines an RGB camera, depth sensor and multiarray microphone running proprietary software that brings "Project Natal" experiences to every Xbox 360 console. The "Project Natal" sensor tracks full-body movement and individual voices, turning you into the controller for social entertainment available only on Xbox 360.
• RGB camera. "Project Natal" has a video camera that delivers the three basic color components. As part of the "Project Natal" sensor, the RGB camera helps enable facial recognition and more.
• Depth sensor. An infrared projector combined with a monochrome CMOS sensor allows "Project Natal" to see the room in 3-D (as opposed to inferring the room from a 2-D image) under any lighting conditions.
• Multiarray microphone. "Project Natal" has a microphone that will be able to locate voices by sound and extract ambient noise. The multiarray microphone will enable headset-free Xbox LIVE party chat and more.
• Microsoft proprietary software layer. A proprietary software layer makes the magic of "Project Natal" possible. This layer differentiates "Project Natal" from any other technology on the market through its ability to enable human body recognition and extract other visual noise.

* Available features will vary in supported games.