Microsoft's living room concept, IllumiRoom, just took a step closer to reality and possible inclusion on the next Xbox with a brand new video showcasing several of the potential features.

Update: In an interview with Engadget, Microsoft Research's Hrvoje Benko and Brett Jones said that the IllumiRoom tech isn't likely to be demoed until July which makes the idea of it being launched alongside the new Xbox seem pretty unlikely at this point.

Still, the Kinect didn't launch with the Xbox 360 so this doesn't mean we won't see IllumiRoom come to the new Xbox at some point in the future.

Original story continues below:

The IllumiRoom has already been teased by Redmond, but now we're able to get a proper look at what the projector-Kinect device might offer Xbox gamers in the near future.

According to the voice behind the video, the concept could be developed into a "next generation game console". No points for guess which console they might be referring to.

So what does it do? Quite a lot, as it turns out. The main aim of IllumiRoom is to overlap the virtual and physical worlds, projecting a larger image that surrounds the TV screen and extends the field of view in games.

"The Kinect captures colour and geometry of the room, and the projector displays illusions around a television screen," says the video.

Your move, PS4

This also leaves IllumiRoom open to other nifty features, including the ability to make objects appear to fall out of the TV and into our lounges.

According to the demo, IllumiRoom is "self-calibrating and designed to work in any living room", meaning that any furniture surrounding the TV won't be an obstacle for the projection.

All the features can also be combined with one another, allowing developers to make the experience as bizarrely immersive as they want. And if there's not enough info in the video for you, a research paper containing a few more of IllumiRoom's intricate details has also been put online.

We're expecting Kinect to be a big feature of the new Xbox so IllumiRoom would be perfectly timed to launch alongside the new console. Only time will tell, but we expect that Microsoft might reveal more at CHI 2013 in Paris tomorrow.