Microsoft on Monday unveiled a motion-based controller for its Xbox 360 entertainment console, and the system -- which Redmond has dubbed Project Natal -- promises to take interactive gaming well beyond today's current state of the art embodied by the Nintendo Wii.

Unlike the Wii, which relies on physical sensors that players must physically hold or touch in some other way, Project Natal uses an array of technologies to "read" from afar players' movements and even, according to Microsoft, gauge their emotional states.

RGB cameras, depth sensors, multiarray microphones, and custom-built computer chips running proprietary software are all part of Natal's arsenal. As a result, Natal is capable of full facial, body, and speech recognition, according to Microsoft.

The upshot is that the system promises gaming that is fully hands-, and even feet-, free. "See a ball? Kick it, trap it or catch it," Microsoft said. "If you know how to move your hands, shake your hips or speak, you and your friends can jump into the fun."

Indeed, in a promotional video for Project Natal, Microsoft shows players steering a race car simply through hand gestures and engaging in virtual fighting matches by punching and kicking as they would in real life. With such capabilities, the system holds promise beyond entertainment -- it could be used for applications such as sports and industrial training.

The catch, of course, is whether Natal's promise will live up to reality. Microsoft hasn't provided a firm release date or named any Natal-compatible game titles, and the company's Xbox franchise has in the past been plagued by a range of quality-control problems.

Microsoft in 2007 took a $1.06 billion charge against earnings to cover the cost of fixing a widespread hardware problem that caused Xbox 360 units to lock up. Microsoft said it has since rectified the glitch.

Still, if Microsoft is able to successfully develop and deliver a Natal-equipped Xbox, it could pose a serious challenge to Nintendo's dominance in the video-game market. Wii outsold Xbox by more than 2-to-1 in the United States in 2008, but Project Natal could be a game changer -- if Microsoft can pull it off.