CES: Microsoft Says Project Natal Coming This Year

In a keynote speech Thursday at the opening of CES in Las Vegas, Robbie Bach, president of Microsoft's Entertainment and Devices division said Microsoft has made "tremendous progress" since unveiling Project Natal at the E3 conference last year, and has been working to ensure that third party developers can create games for it.

"2010 is going to be the biggest year in Xbox history," Bach told a packed conference hall at the event.

Project Natal is a blend of 50 percent hardware and 50 percent software, and it represents the convergence of years of research and is protected by over a thousand patents, according to Bach.

In Project Natal, the body itself is the controlling device, and the technology evaluates trillions of body configurations and movements every second and uses 3D cameras to faithfully reproduce human movements on-screen.

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"We are removing the last barrier to gaming: the controller," Bach said. "Project Natal is the best of our imagination created on software and completely under your control."

As a gaming oriented technology, Project Natal probably isn't on the radar for many VARs, but the level of innovation it represents is astonishing. But Bill Gates has been a huge proponent of natural user interface research, and the fruits of this are now seen in the multi-touch support in Windows 7. In light of this, Project Natal would certainly seem to have implications for other Microsoft business areas down the road.

Microsoft's work on natural user interfaces will also be seen this year with the arrival of new PC form factors powered by Windows 7, Microsoft CEO Steve Ballmer said in the keynote. He wasn't referring to Courier, the tablet-like device Microsoft Research prototype that surfaced in September, but to slates, an emerging PC category that takes advantage of the multi-touch and mobility features in Windows 7.

"These devices are perfect for reading, surfing the Web and taking entertainment on the go," Ballmer said, adding that HP and other OEM partners will start rolling out slates later this year.

Slates will pose challenges to current e-readers on the market, and Ballmer showed a demo of HP's model running Amazon's Kindle software for PC. Flipping easily through the book using the touch features of Windows 7, and with full color pages, it was hard to see any difference between the slate and current e-readers.

Indeed, the demo served to underscore earlier statements Ballmer has made about Microsoft having no intention of getting into the e-reader space but being open to partnerships with Amazon and other e-book sellers. "We have a device for reading. It's the most popular device in the world. It's the PC," Ballmer told Reuters last October.

Ballmer didn't address the situation with Windows Mobile other than to hint at a forthcoming HTC smartphone that'll run Windows Mobile 6.5 and say that Microsoft will have more to say at the Mobile World Congress event in Barcelona next month. And in a keynote filled with things Microsoft is doing well, his avoidance of the subject was obvious.

It's hard to look at the natural user interface technology behind Project Natal and not realize that it's probably going to dispel the 'Microsoft doesn't innovate' canard once and for all. If Microsoft were to put the R&D muscle behind Windows Mobile that it has done with Project Natal, it probably wouldn't be in such dire mobile straits.