Looking at the demo videos, it's amazing to think that this whole motion control thing began with the Wiimote, and now has grown into something that could revolutionize UIs in general -- did anyone else see the demos and immediately begin wishing for something like this? But beyond the possibilities for computing generally, what Natal does for gaming -- especially casual gaming -- is incredible. While I doubt that motion control -- even motion control that's more refined than what's currently available -- will entirely replace a controller, it's another big step in removing barriers between non-gamers and games. Ultimately, the goal with Natal is to allow anyone to intuitively control a game, using only the knowledge of how to move their bodies. The Wiimote has already made huge strides in this respect, and Nintendo has the sales numbers to show for it. And to a certain extent, success for Nintendo is success for gaming as a whole -- the more people are acclimated to playing accessible games, the more gaming continues to become part of mainstream popular culture.
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So Natal is a great opportunity for the future of gaming, but now let's all hope it doesn't get totally fouled up. While the Wii's motion controls were fantastic for the accessibility of gaming, the system produced a truly amazing amount of absolutely awfulshovelware, which nonetheless seems to sell copies at least in part because of the novelty of motion control. If Natal ends up being a goldmine for developers who want to cash in on a new control system, it'll pretty quickly stop looking like the future of gaming and start being another source for waggle jokes.
Natal technology already exists... it's called "mocap boxing" - http://videogameworkout.com/2005/09/mocap-boxing.html