2012 saw the continued evolution of three consumer technologies — autostereoscopy, touch-sensing, and motion sense – with direct application in the gaming world.

As an analyst in the tech industry (I do this gaming stuff for fun and occasional profit), I’ve witnessed these burgeoning advancements spread from the fevered dreams of OEM engineers to vertical-market trade shows, the Consumer Electronics Show, and finally E3 and the games industry.

None of these technologies debuted in 2012, but they’ve each matured and become an indispensable part of gaming. For perspective, here’s a link to last year’s article.

Seeing in three dimensions without goofy eye wear

For those who don’t know, “autostereoscopy” is an informal term in the tech industry for glasses-free 3D – “stereoscopy” refers to the process by which combining two offset images gives the illusion of depth (three dimensions), and “auto” denotes the glasses-free component.

Autostereoscopy uses a parallax barrier to create 3D images without the need for special glasses. This differs from an active shutter system (like Nvidia 3D Vision), which, through special driver software and glasses that present alternating left- and right-eye images, presents the illusion of depth.

Most consumers are familiar with polarized 3D systems, by far the oldest and most mature of these technologies. These are the sort most often found in theaters and theme parks.

Of the three techniques, autostereoscopy shows the most promise, but the tech is inherently limiting, as the 3DS amply demonstrates. The biggest downside to glasses-free 3D is its highly restrictive viewing angles. In my own experience, it ranges anywhere from 45 degrees to 60 degrees. Move too far in any direction and it breaks the illusion. In that way, the 3DS – and its parent technology – are not dissimilar to a hologram.

When the 3D revival began in recent years, the consumer electronics industry threw all their weight behind this oft-maligned gimmick.  CES became saturated with 3D TVs, 3D movies, 3D projectors, 3D laptops, 3D gaming, and more than enough 3D to turn off consumers — which it did. Whereas the leap from cathode ray tube (CRT) to flat-screen was monumental, 3D wasn’t nearly enough to convince most people to abandon their “obsolete” LED TVs. Most consumers apparently saw it as a stop-gap solution.

OEMs lay the groundwork for autostereoscopy

I saw the foundation of the 3DS’s glasses-free 3D tech at optoelectronics events (essentially, anything having to do with displays and lighting), and a large manufacturer – rhymes with “Carp” – demoed a small form-factor display long before it did (or didn’t … shhhh) become part of a certain Nintendo handheld.

And yet, Nintendo’s autostereoscopic handheld system – which may or may not have utilized display technology from Japanese manufacturer, Sharp – faced an uphill battle due to inherent limitations with the tech, itself.

The 3DS was hobbled from the start – health reports loudly trumpeted claims that 3D was unhealthy for children, while many viewers (myself includes) get headaches and/or nausea from observing stereoscopy for too long. And up to 12 percent of the population suffers from “stereoblindness,” which prevents the individual from seeing 3D images.

But the 3DS’ biggest handicap was its restrictive viewing angles, given that its claim-to-fame was its autostereoscopy technology. On July 28, Nintendo partially mitigated this problem with the release of the 3DS XL, which increased the screen size by more than 90 percent — (top: 4.88 in [124 mm], bottom: 4.18 in [106 mm]). But was it too little, too late?

GamesBeat writer Jasmine Maleficent Rea noted that “The 3DS XL is what the 3DS should have started as.”

But she also addressed the system’s improved capabilities: “A wider viewing area enhances the 3D effect, making some games that were too blurry in 3D a joy to play. For those of us with horrible vision, larger screens are a must, and because of this advancement, the 3DS XL is a great step toward people accepting a ‘gimmicky’ feature as a viable gameplay tool.”

Most consumers still do see 3D as a gimmick, and autostereoscopy is but a fancier gimmick. But for stereoscopy to ever become part of mainstream entertainment, it must shed the clunky glasses and develop into a mature, glasses-free technology.

Pinching, swiping, and styli

Capacitive touch – which underpins your iPhones, Samsung Galaxys, Droids, and countless smartphones – has become more prominent as the platforms supporting it have eked out a bigger piece of the pie. And resistive touch – the passive cousin of capacitive – has done even better for itself, featuring prominently in the Wii U gamepad (not to mention countless commercial applications like ATMs and credit card payment machines).

Resistive touch sensing – which registers pressure via fingers, styli, and other objects – is hardly a new technology. Because of its versatility compared to competing systems (like capacitive touch), resistive touch is popular in commercial applications like ATMs.

Nintendo utilized this relatively primitive touchscreen technology for its DS and 3DS systems, presumably to save a buck and to enable the use of styli.

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Microsoft Kinect–based medical software startup Jintronix has won the $50,000 top prize at Montreal’s International Startup Festival.

Jintronix, a finalist for Microsoft’s TechStars-based Kinect Accelerator, creates Windows-based games that aim to make physical therapy and rehabilitation fun and afforable. The games utilize Microsoft’s Kinect motion-tracking hardware, and we handily talked to the company before their big win.

“Physical therapy has been the same for the past four decades, and there hasn’t been much change in the types of exercises that are available to patients,” Jintronix CEO Justin Tan told VentureBeat. “The patients aren’t adhering to their regiments either because of lack of access, it’s too expensive, or it’s just boring. Our system is changing that by getting them the care they need at home.”

Since starting work on Kinect-focused games in March, the startup has developed three games  focused on different kinds of physical therapy, such as balancing your body and moving and stretching your arms. Ideally, the company hopes to incorporate other types of technology in tandem with Kinect to expand its tracking capabilities in the future.

Tan conceived of the startup during his final year at MIT, after his father suffered a stroke and saw problems with rehabilitation up close. “It’s a heartbreaking experience to see patients that need to get better and struggle with it because of the state of the health-care system,” Tan said. “We want to focus on helping patients get better and making it as simple as possible.”

Tan first’s creation at MIT a proof-of-concept for motion-based physical therapy that used a the motion-sensing controller from Nintendo’s Wii console, but the company is focuses on Kincect now. Tan decided to fully realize his idea after moving back to Montreal after school, and he now works with seven other employees on the software.

Tan founded Jintronix in 2010 and is in the process of raising a seed round.

The other ISF winners are:

• Winner of Startup Stage Pitches: Openera
• Winner of Elevator Pitches: Bridge4Events.com
• Winner of the Teenagers’ Pick Award: From stage pitches: Storypanda / From tent pitches: Foodo
• Winner of the Grandmother’s Pick Award: From stage pitches: Gas Smart / From tent pitches: Jintronix
• Winner of FounderFuel Prize: Openera

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Big data startup Kaggle just launched a machine learning competition to develop an algorithm that Kinect can use to learn to recognize a new gesture from a single example. There are cash prizes of $10,000 for the top algorithms, and Microsoft may pay up to $200,000 to license them.

Let’s say you want to use a new gesture to control video editing software. Show Kinect a chopping gesture once and using the new algorithm it should recognize that gesture in future. You can then map the new gesture to, for example, the “cut” feature. Adding new gestures currently involves a considerable amount of manual work.

Kaggle runs Big Data challenges, which involve developing new machine learning algorithms or finding useful patterns in large data sets. “Gesture technology is not a mature area,” said Kaggle’s president and chief scientist Jeremy Howard. While learning from a single example, or “one-shot-learning”, is not an new problem in the machine learning world, “It’s not solved well enough,” Howard explained.

The competition is not specifically for gaming applications. The algorithm could be used for tasks like interpreting sign language, controlling robots or appliances or recognizing when a patient in a hospital room is in distress. Each application has its own vocabulary of gestures, which is what makes it important that Kinect can learn them rather than have to be programmed explicitly for each gesture.

Competitors get a set of videos clips showing examples of gestures (one example of each gesture) that they use to develop their algorithm. The gestures come from different vocabularies such as diving signals and American Sign Language. During development, the algorithm can be tested on a set of 1-5 examples of each learned gesture to see how well it performs at recognizing them. A final set of data, the validation set, can be used by competitors to evaluate their progress and compare their work with others. A real-time leaderboard shows participants their current standing based on their validation set predictions.

“Winners are generally not domain experts but machine learning experts,” said Howard. He should know. Before he became its president, Howard was Kaggle’s most successful competitor. Kaggle is popular with data scientists not only as a way of proving their skill but also because Kaggle gives them access to new data sets that are otherwise hard to find. Kaggle’s community of data scientists comprises thousands of PhDs from quantitative fields such as computer science, statistics, econometrics, maths and physics. “We often have people working on 2-3 competitions at the same time,” said Howard.

Kaggle has already had a couple of big wins. A competition run by NASA and the European Space Agency resulted in a 350 percent improvement on the existing algorithms for mapping dark matter. Insurance company Allstate improved 340 percent on the best available algorithm for evaluating how likely it is that someone will be killed or injured in an accident involving a particular car model.

The biggest competition currently running is the $3 million Heritage Health prize, which aims to predict and prevent unnecessary hospitalizations, thereby saving the U.S. up to $30 billion per year in unnecessary hospitalizations. “This is one of the few times that health data has been anonymized and made public,” Howard told me.

Let the games begin.

Kaggle was founded in 2010, is based in San Francisco and has raised $11 million in funding to date.

Star Wars fans (myself included) have been waiting for a good motion-controlled Star Wars game that lets them wield a Lightsaber, the sword of the mythical Jedi in the Star Wars universe, and use the magic-like force with their own hands. Microsoft let slip that the game was coming last night, but the company gave a live demo of the game on-stage today.

A few games have attempted to recreate the magic of the Star Wars universe, but they haven’t come close to creating a seamless experience just yet. There’s still a niche for a proper motion-controlled Star Wars game that features decent swordplay since motion-controlled gaming became popular. It’s a series so iconic that it would be able to attract both hardcore and casual gamers alike — a move that Microsoft has been attempting with its take on motion-controlled gaming.

But it looks like the game still has a few kinks to work out. It certainly looks fun, but the motion controls on screen lagged slightly when compared to the player’s motions on stage. It also seems like most of the content is scripted and there is very little technical movement. The game, at first glance, seems like a “wave your arms like a maniac to win” game — though the player on stage had a little bit of trouble moving a piece of equipment around with the Force.

You can see a full video of the demo below. Be sure to check out VentureBeat over the next few days for wall-to-wall coverage of E3.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The game will let players take a virtual tour of a carbon copy of Disneyland, a popular theme park in California that features Disney characters like Mickey Mouse and Donald Duck. Microsoft has rebuilt the whole experience of visiting the Magic Kingdom piece for piece, except for one small difference — players can fly through Disneyland instead of walking.

It’s one of the new ways players can interact with games since the advent of motion-controlled gaming. Nintendo’s Wii was the first console to popularize motion-controlled gaming by giving players a remote-and-nunchuk combination to control games like The Legend of Zelda. It was a risky move, but the gambit proved successful in making motion-controlled gaming more appealing to mainstream audiences because it was much more immersive than using typical controllers.

Microsoft is pulling out all the stops to make sure the Kinect is as appealing as possible to just about every audience. The Wii was successful initially because it was able to hit both casual audiences with games like Wii Sports and hardcore audiences with games like The Legend of Zelda: Twilight Princess. Most games for the Kinect, like dancing game Dance Central, have been more appealing for casual gamers — but that’s poised to change at E3 this year with the presence of games like Child of Eden and the new Star Wars title.

The Kinect is a strong part of Microsoft’s portfolio and has been a large factor in the company’s recent success. Revenues from Microsoft’s entertainment and devices division was up 60 percent to $1.9 billion in the third fiscal quarter this year, from $1.2 billion in the third quarter last year. Revenue rose 13 percent to $16.4 billion, up from $14.5 billion in the same quarter a year earlier.

The Disneyland adventure game looks like it will be less of a “game” and more of an “experience,” which is what Microsoft is trying to evoke by immersing gamers even further with motion-controlled gaming. The company has tried to market its Kinect motion controller as an experience by giving Xbox 360 owners ways to control other parts of their Xbox 360 with motion controls — like the menus in the console’s dashboard that let owners access popular applications like Hulu and Netflix.

Microsoft will also launch a long-expected Star Wars game that will let Kinect owners control characters in the Star Wars with their own bodies. That means they’ll be able to swing around Lightsabers — the iconic sword of the mystical Jedi in the Star Wars universe — and use magic-like Force abilities within the game. Most Star Wars fans (myself included) have been gunning for a proper motion-controlled Star Wars game that features decent swordplay since motion-controlled gaming became popular. That shows that motion-controlled gaming can appeal to hardcore gaming audiences as well as more casual audiences.

The Xbox manufacturer is also targeting children with its Kinect motion controller by releasing a game that lets kids and their parents dive into the world of Sesame Street. Players can interact with characters in the Sesame Street universe, which is populated by puppets like Elmo and Cookie Monster — both of which are iconic images in children’s entertainment.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft’s Kinectified game business grows 55 percent — fastest-selling consumer electronics device in history — Call it Kinectification. Microsoft said Thursday that its video-game business grew dramatically thanks to sales of its Kinect motion-sensing system.

What you should know about LinkedIn’s IPO — We look at some of the most significant facts about the professional networking company and its IPO plans.

Sean Parker says he enjoyed The Social Network film, but “it’s complete fiction” — Parker, who was depicted by Justin Timberlake in the movie, said his life was over-glamorized, and that the film inaccurately describes how he treated Facebook co-founder, Eduardo Saverin.

Motorola’s Xoom tablet landing at Best Buy Feb. 17 for $700 — Looking to get your hands on the best-looking Android tablet from CES? You won’t have to wait much longer.

Facebook phone from HTC rumored to debut next month — Here we go again: Rumors of a potential Facebook phone have emerged once more.

And here are five more posts we think are important, thought-provoking, fun, or all of the above:

Obama urges 80 percent clean energy by 2035, gives electric cars a shoutout — In his state of the union address Tuesday night, President Obama called for an end to oil subsidies and set a national goal of reaching 80 percent clean energy by 2035.

You know what’s cool? 8 Oscar nominations for The Social Network– That the film was well-received by the Academy of Motion Picture Arts and Sciences comes as no surprise — The Social Network was a critical darling, and it also walked away with four Golden Globe awards, including Best Picture.

Facebook CTO: 2011 is all about mobile and HTML5 — Facebook may be the most-downloaded free application on the iPhone, but the company’s chief technology officer Bret Taylor seems more excited about the opportunities offered by the mobile Web and HTML5.

Kongregate takes another crack at launching online arcade on Android — It’s round two in the Google versus Kongregate mobile arcade match — and hopefully there will be less drama this time around.

Eric Schmidt sees next decade as age of “augmented humanity” — Eric Schmidt may not be chief executive of Google for long (he turns that title over to Larry Page on April 4). But he isn’t going to stop sharing his vision for the future.

Skype outage affects tens of millions — Skype suffered a widespread and lengthy outage Wednesday with its Internet calling service.

Microsoft says “Not!” to Kinect sex game — Microsoft got excited when hackers started coming up with novel uses for its Kinect motion control system. But it was less than thrilled with the idea of using Kinect for sex games.

How mobile apps are spying on us — Your favorite mobile apps could be collecting and transmitting your personal information, including your name, contacts, location and even your phone’s unique ID number, to ad networks and other third parties.

The best and worst in mobile 2010: It’s all about Apple and Android — We look back at the year in mobile news.

And here are four more posts we think are important, thought-provoking, fun, or all of the above:

How Twitter acquires people — When is an acquisition not an acquisition? When Twitter’s involved, apparently.

When Tesla’s lockup expires Monday, will its stock drop? Short sellers think so — Tesla’s IPO has been one a few super-successful cleantech public offerings this year, if not the most successful. But will the good news continue after the 180-day post-IPO lockup period expires Monday and new shares flood the market?

Foursquare, Gowalla, Instagram: Mobile photos are everywhere — It’s been a big week for numbers about photos.

Salesforce nabs another Y Combinator startup in email contact manager Etacts — Salesforce announced Tuesday that it has acquired email contact manager Etacts for an undisclosed sum.

[top image via ReadWriteWeb]

Review: Call of Duty Black Ops shows games can beat the drama and action of movies — The continuous improvement of this game series shows something that fans have long known. Video games are as good at telling stories and conveying artistic themes as movies, books, or music.

Apple’s Wozniak calls Android the winner in smartphone race — Oh Woz, we love it when you shoot from the hip.

Can the internet bring down the TSA’s new enhanced pat-down search, also known as “touch my junk”? — Would-be traveler John Tyner has become a cause célèbre on the internet because he refused to subject himself to what he considered to be invasive body searching at the San Diego airport.

Steve Perlman shows off OnLive’s disruptive MicroConsole (video) — We talked to OnLive’s chief executive about its games-on-demand system.

Google investor John Doerr: Zynga is our best company ever — Doerr, the legendary Silicon Valley venture capitalist, gave high praise to Zynga, the leading social game company, saying it was one of the best investments his firm had ever made

And here are five more articles we think are important, thought-provoking, fun, or all of the above:

Battle for your texts: Facebook Messages vs. Kik mobile chat — Now that we’ve seen Facebook’s new messaging service, it’s clearly not the threat to email we previously thought. But the new messaging service could pose a problem for the hot mobile chat startup Kik, which we’ve covered extensively.

Confirmed: Accel sold Facebook shares at $34B valuation — Looks like it isn’t just employees who are cashing out on their Facebook shares.

Microsoft and Cisco throw down the gauntlet for living room teleconferencing — Cisco’s Umi teleconferencing camera for home living room use and the Microsoft Kinect motion controller have more in common than you might think.

Why Texas may be a better electric car state than California — When power plant heavyweight NRG Energy announced that it would invest $10 million in the rollout of the nation’s first privately-finance electric vehicle charging network, it also revealed that the city it would debut in would be … Houston, Texas. Um, what?

Developers: Get ready for your closeup in VentureBeat’s Mobile App Spotlight — Are you an app developer with a creation that’s ready for the klieg lights? VentureBeat has partnered with Intel to provide a new showcase for your mobile app: VentureBeat’s Mobile App Spotlight.

Microsoft said it has sold 1 million units of its newest motion-control system for the XBox 360, the Kinect, in just under two weeks and is on track to sell 5 million controllers by the end of the year.

The system records a person’s movements and allows them to control games using their bodies. The Kinect controller also features a microphone array that can detect what someone is saying from pretty much anywhere in the room.The controller allows XBox 360 users to control the console with their voice alone. For example, they can say “Xbox ESPN” to bring up the ESPN channel on their Xbox 360 dashboard. The Kinect device allows Xbox 360 owners to start video chats with other Kinect users, as well as voice chats with Windows Live users.

That’s not where the fun ends, though. And a number of intrepid hackers managed to crack into the device and open up its software to other developers. The effort was undertaken at the urging of New York-based Adafruit Industries, which offered a $2,000 bounty for an open-source hack. Hackers have already produced a functioning demonstration of Kinect being used for multi-touch gestures. You know, the kind you see in futuristic movies like Minority Report.

Compare that to the Nintendo Wii and the Sony Move, both of which are hand-held controllers developed exclusively for games. They are game controllers in the truest sense and do little to help navigate the media experience on either console outside of point-and-click actions.

So far it seems like the best bits of Kinect have shown up outside of the actual gaming component. The controller launched with a number of games like Dance Central, which teaches players how to dance and gives them scores on how well they match up with professional dancers. But the launch titles were quite lukewarm, and Kinect isn’t quite as good as it should be, according to VentureBeat’s gaming guru Dean Takahashi.

What isn’t immediately clear is what is driving the sales. Are buyers attracted to the device’s power outside of the context of games, or do they plan to use it primarily for games? About 40 percent of all time spent using the Xbox 360 is spent on activities outside of video games, said Dennis Durkin, chief operating officer of Microsoft. So that almost guarantees that at least some consumers picking up the device are doing so to turn their XBox 360 into a voice-controlled media center.

Consumers can pick up the new controller for $150 by itself, or as part of a bundle with a new XBox 360 for $300. The company didn’t specify how many XBox 360 consoles it sold as part of the Kinect bundle.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The Umi (pronounced you-me) telepresence is a powerful webcam that sits on top of a television and is connected to the internet to enable video conferencing. It’s Cisco’s first true play to the typical consumer after being a dominant player in big-business hardware for most of its life. And it’s a last-ditch effort to salvage the holiday season after the company lowered its expectations for sales in the fourth quarter.

But that price point is simply baffling. There are already a number of other options available for home teleconferencing. Logitech is selling a Google TV enabled set-top box with an HD camera for about $450. XBox 360 owners can go pick up Microsoft’s Kinect camera for $150 and use it for home teleconferencing. Even those without an XBox 360 can go pick up the device and Kinect for around $350 — and get a video game console in the process!

I had a chance to try out the newest teleconferencing offering from Cisco a little while ago, and I was quite impressed with the actual technology. The camera is powerful and it does have a number of useful features, like streaming video in high-definition. The image is very clear and there’s almost no lag between callers, provided your Internet connection is fast enough. In addition to calling other Umi owners, the Umi device can also connect to any computer with a web-enabled camera — though it’ll be at a lower resolution.

Umi owners can use it to leave voicemail messages and greetings when they aren’t around to answer calls. Users can also shift the camera around to focus on certain parts of their living room. And for the privacy nuts, there’s a shutter that covers the camera when it’s not in use.

The price point is really telling. There is a very large disconnect between the consumer space and enterprise hardware providers like Cisco. The hardware is clearly more powerful, but that’s not always what consumers are looking for. There are simply too many other options for casual video conferencing users out there that have more features to justify the Cisco Umi at this point.

[Photo: joelogon]

Apple fails to fix iPhone Daylight Saving Time alarm bug for US — If you live in the US, we hope you didn’t rely on your iPhone’s alarm clock to wake you up on Monday morning.

Microsoft’s Kinect gaming control hacked already — Just a few days after the launch of Microsoft’s Kinect motion-sensing game system, hackers broke the security behind it.

Gmail creator Paul Buchheit leaves Facebook for Y Combinator — Y Combinator, the increasingly famous Silicon Valley incubator, announced two new general partners Friday — Gmail creator/FriendFeed co-founder Paul Buchheit and Harj Taggar, who was already working at YC as a startup advisor.

The iPhone app is the Flash homepage of 2010 — In the late 1990s, it was common for companies to spend $50,000 to $150,000 for a Flash homepage that looked like a beautiful brochure. However, they soon learned that Flash was cumbersome, slow to load, expensive to build, and hard to update, and moved on to HTML. Guest columnist Peter Yared argues that the same trend is replaying itself on the iPhone.

Amazon’s secret retail empire — Jeff Bezos has a loud laugh. But Amazon.com’s founder and CEO is keeping quiet about his expansion efforts, which now include sites as varied as BuyVIP.com, Zappos, and as of Monday, Diapers.com.

And here are five more posts we think are important, thought-provoking, fun, or all of the above:

Attention, flight-search startups: Priceline, Expedia say hotels are where it’s at — Are today’s flight-focused travel-search startups like Hipmunk trying to solve the wrong problem?

Why Windows Phone 7’s first day sales numbers don’t matter — Following a flurry of online speculation about the sales of Microsoft’s new mobile platform, VentureBeat’s Devindra Hardawar said he’s becoming convinced that the actual first day sales don’t matter.

Are fleet sales the future of electric cars? GE will take 25,000, please — GE announced plans this week to make the largest purchase in the history of electric vehicles — 25,000 cars by 2015.

Privacy on social networks a concern for old, not young — Concerns about privacy on social networks have increased drastically since a year ago among older users, but not younger ones, a new study shows.

Will RockMelt’s social features shake up the browser market? — There’s been a flood of news coverage for RockMelt, a new Web browser that’s just opening to the public. The response isn’t surprising, since the founders have big ambitions and have been validated with funding from Marc Andreessen, the co-founder of Netscape. But there’s been some backlash too, in part because RockMelt’s promises sound awfully familiar.

That’s because Microsoft is making a play at bringing video conferencing to the living room — and taking on video conferencing titan Cisco — as part of its media package with the newest addition to its Xbox 360 video game console, the Kinect (pictured at left in use by VentureBeat’s Dean Takahashi).

The Kinect controller features a camera and a microphone array that can detect what someone is saying from pretty much anywhere in the room. The controller allows XBox 360 users to control the console with their voice alone. For example, they can say “Xbox ESPN” to bring up the ESPN channel on their Xbox 360 dashboard.

About 40 percent of all time spent using the Xbox 360 is spent doing activities outside of video games, said Dennis Durkin, chief operating officer of Microsoft. That can range from watching Netflix, to accessing Facebook, to using the Kinect controller to chat with friends through Xbox Live. Microsoft’s goal with Kinect is to turn the entire Xbox 360 experience — not just the video games — into a social experience, Durkin said. He made the comments at the 18th annual Digital Entertainment conference hosted by BMO Capital Markets today.

The Kinect device allows Xbox 360 owners to start video chats with other Kinect users, as well as voice chats with Windows Live users. Cisco’s Umi telepresence, in comparison, can make calls to other Umi users as well as any other computer with a webcam. Umi also has a few other bells and whistles, such as the ability to leave voicemail messages and greetings. The camera is also more powerful, and lets users stream their video conferences at higher resolutions.

Cisco has been a huge name in enterprise video-conferencing technology and has also won itself a presence in the home networking market with its wireless routers, a market it entered by acquiring Linksys in 2003 and expanded by acquiring set-top maker Scientific Atlanta in 2005. The enterprise giant’s push into the consumer space just goes to show how large the consumer market is.

But Kinect, which launched last week, has the jump on Umi. Cisco’s home teleconferencing device launches next week at Best Buy stores and costs a whopping $600. Umi users also have to pay an additional $25 a month to use the teleconferencing service. Kinect costs only $150 and already ties into the Xbox Live service. Microsoft is making one thing clear — there’s only room for one ominous-looking camera device on top of living room televisions.

Microsoft’s top video game executive Don Mattrick said he expects Kinect to provide Microsoft with one of the “biggest holidays ever” for sales, according to the Wall Street Journal.

Motion gaming is the flavor of the holiday season in 2011. Sony will get a bit of a jump on Microsoft by releasing its Playstation Move motion controller in the immediate future. Sony also earlier today said it expects to sell around 15 million Playstation 3 units by the end of its fiscal year in March 2011.

Both Microsoft and Sony seem to be making rather bold claims as the oft-called “recession-proof” video game market shows signs of weakening, with sales in August down about 10 percent, largely a result of weakening portable hardware sales.

But despite an otherwise gloomy outlook, gamers and developers may have a lot to look forward to in the coming months if the strong initial showing by Halo: Reach is anything to go by. The game kicked off the holiday sales season with a unprecedented sales, racking up $200 million in about 24 hours and blowing the previous Halo sales records out of the water. The newest Halo’s sales, however, did not match the previous record of around $300 million in one day for Activision-Blizzard’s Modern Warfare 2 title.

On top of Halo: Reach, several other Triple-A titles — like Call of Duty: Black Ops, Medal of Honor, Fallout: New Vegas, Rock Band 3 and Star Wars: The Force Unleashed 2 — are on deck and look like they could make quite a splash for the traditional controller. Launch titles for Kinect include a variety of activity-heavy games like Dance Central and EA Sports Active.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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