Microsoft unveils new Xbox technology, enlists Facebook

By Franklin Paul

LOS ANGELES (Reuters) - Microsoft Corp on Monday offered a glimpse into a future where the Xbox 360 console is the centerpiece of any living room, and games, social interaction and communications are controlled with the wave of a hand.

At a star-studded event at the annual E3 video game conference that drew appearances by Paul McCartney and Steven Spielberg, the company unveiled "Project Natal," which uses a camera to track a user's movements via full skeletal mapping. It also recognizes voices and vocal commands.

The technology obviates the need for a controller or remote device to enable a player for instance to drive a car in a game, interact with a character on screen or show pictures and information to other Xbox 360 users over the Internet.

"You are the controller," Shane Kim, Microsoft's vice president of strategy and business development for videogames, said in an interview in Los Angeles.

"That's a very powerful piece of technology -- full body gesture tracking, not just two hands."

On Monday, Microsoft also said it planned to boost its Xbox 360 gaming console by integrating music-streaming service last.fm, Web social network Facebook and microblogging site Twitter into its Xbox Live online community.

The announcements underscore how the interactive gaming industry, a growing business with estimated annual sales of about $50 billion despite the economic downturn, is looking into ways to attract new gamers while retaining their core audience.

Perhaps with an eye on the economy, Don Mattrick, senior vice president of Microsoft's Interactive Entertainment Business, said the "Natal" technology can refresh the gaming experience without making consumers buy a new device, which typically costs $250 to $500. Microsoft would also avoid hefty manufacturing and marketing costs.