We all knew it was coming, well here we go!  The simple tagline explains it all, "You are the controller!"  There will be a motion sensoring camera that sense your every move, from driving to fighting.  You will use your entire body to enteract with the game with the use of full body motion capture.  You can use your own gear to scan images, such as a skateboard that will be translated directly into the game.

This new feature will also include voice recognition, for areas such as game shows where you will be able to shout out the answers and the game will understand what  you say.

The device is shown at the end of the trailer, pictures coming soon.  I guess the motion sensor controller and the game was nothing but a rumor, but the motion sensor idea is indeed alive!

It is announced to be called Project Natal and will work with every Xbox 360 as well as being sold with Xbox 360s in the future.

Steven Spielberg comes on to talk about how this new technology will revolutionize gaming by allowing anybody to play video games by using your entire being instead of being hindered by a controller.  Looks interesting indeed..

A demo is shown, starting with the Dashboard.  As soon as you turn your Xbox 360 on, you will be automatically signed in because Project Natal will recognize you based on facial recognition. Wow!  Also, you can navigate the Dashboard menus by moving your hands.  The game Ricochet is demoed, which is basically Breakout, where your body is the paddle.  The game recognizes your every body movement from head to toe.  The technology will also allow multiple people to be recognized at once, allowing multiplayer games in the same room.

The second game demoed is Paint Party, which also recognizes voice recognition by saying colors or actions, and you use your hands you are able to splash colors onto the canvas.  When forming actual pictures, you can use photo recognition by posing and forming a stencil.  Kind of corny, but the way the motion sensor capabilities work are absolutely amazing!

Peter Molyneux comes out and shows a video enacting Natal in work and how innovative this technology can become.  The video shows a boy named as Milo that is able to interactive directly with the person playing it, and is able to recognize what is said.  Claire, the girl playing this interactive demo, was able to draw on a sheet of paper, hold it up to Milo, who then took it and was able to recognize everything including the color.