Microsoft is rumoured to be buying motion-sensing technology specialists 3DV, in a move which, should it turn out to be true, will no doubt be seen to be as a response to the popularity of Nintendo's Wii.
Israeli news site Haaretz claims that Microsoft is looking to purchase 3DV for a cool $35 million. Currently, neither company will comment on the rumour.
3DV's ZCam 3D depth cameras are similar to Sony's PlayStation EyeToy and Microsoft's own Xbox Live Vision camera, only far more accurate.
Better than Wii
Venturebeat's Dean Takahashi is one games journalist who has already been mightily impressed with the gaming potential of the tech.
"When I did a demo of the technology, I was able to control a game just by waving my arms around. I could fly a plane by pretending to hold a joystick and also box against a virtual fighter by throwing punches toward the camera," writes Takahashi.
"The motion detection was accurate, much more so than with the Wii, which uses relatively cheap but primitive accelerometers and infrared technology for motion detection."
3DV's tech has been used in "advanced defense systems" and, if used by Microsoft in Xbox 360 games, should prove to be a serious competitive advantage over both Nintendo and Sony.
"The key to making a real difference in the gaming experience lies in the control," 3DV claims on its website. "Sony acknowledged that, and launched EyeToy, Microsoft followed with their own camera, Vision. Nintendo took it a step further, introducing Wii. But the revolution is still around the corner."