Project Natal is coming to an Xbox 360 near you later this year. And Microsoft has released a new video demo to explain a little more about the background to the new motion controller.

We have already been treated to Steve Ballmer's CES keynote – in which the Natal news was one of the highlights – yet there is still a lot that gamers want to know about how the thing actually works.

Elsewhere, there are reports emerging that Project Natal has been hit by cost-cutting measures in order to provide the final hardware to the consumer at the lowest price. We have contacted Microsoft and a number of games developers for further information on this.

Providing Microsoft can launch Natal in time for Christmas at an agreeable price point with a decent launch line-up of titles, we will be happy.

Via CVG and VG247