By NICK WINGFIELD
http://online.wsj.com/article/SB124215416209111679.html

Microsoft Corp. is developing a new videocamera for the Xbox 360 console
that will allow players to control games with the movement of their
bodies, people familiar with the matter said, an effort to attract the
casual players who have fueled Nintendo Co.'s recent success.

The Microsoft device is a twist on Nintendo's blockbuster Wii game
console, which allows users to swing a tennis racket or other equipment
in games by holding a plastic wand in their hands.

Unlike the Wii, the Microsoft camera won't require users to hold any
hardware to control on-screen action, the people familiar with the
matter said. The camera would sit near the television and capture when
players move their hands, legs or head.

A spokesman for the Redmond, Wash., company declined to comment.

The camera represents another effort by the games industry to reach out
to consumers with more intuitive playing methods than traditional game
controllers, with their array of joysticks and buttons.

Microsoft's camera uses 3-D technology, which gives players more
accurate control over games than earlier game cameras did, the people
said.

The potential move suggests Microsoft is stepping up efforts to gain
ground on Nintendo, the leader in the market for the current generation
of game consoles. A spokeswoman for Nintendo declined to comment.

Although Nintendo recently signaled that demand for its Wii may start to
slow, it sold 601,000 Wii consoles in the U.S. in March, more machines
than Microsoft and Sony Corp. combined, according to NPD Group, which
tracks retail sales.

The Microsoft camera could be unveiled as early as the E3 videogame
industry conference next month, though it likely won't be released until
next year, the people said.

Microsoft, which saw revenue in its games division fall 1.6% to $1.57
billion in the latest quarter, is likely to sell the camera first as an
accessory and could ultimately bundle it with the Xbox 360, a person
familiar with the company's plans said. Pricing couldn't be determined.

The camera is based on technology that Microsoft developed. Microsoft
also recently acquired an Israeli start-up called 3DV Systems Ltd.,
which has developed a 3-D camera and holds related patents, according to
a person familiar with the matter.

In an email, Zvika Klier, chief executive of 3DV Systems, said
"unfortunately I can't comment on the rumors surrounding this deal.
...We will provide more information when we can."
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