Ok! So Microsoft decided to take on the Nintendo Wii. Microsoft's Xbox based Project Natal seems the answer. I also learnt that Johnny C.Lee was helping them develop this. The video below is from E3 2009 Expo and some are Official demonstration videos. Im happy that Xbox is using stereoscopic tracking. And when I watched the demos, it seemed that the actors are trying to mimic the character on screen rather than the character reacting to the user movements (Latency issues of tracking? May be..). However it works and well done !!