Microsoft's motion control technology Project Natal is most likely to be introduced as a spoiler to dampen the launch of an expected high definition upgrade to Nintendo's Wii console.
That's according to Michael Pachter, analyst for Wedbush Morgan, who doesn't believe the new Microsoft tech is likely to launch until after 2010 and only with significant third-party support.
"We think that Project Natal is intended less as a game control scheme than it is as an easy-to-use dashboard control scheme, and we do not expect the device to be launched at retail until it has sufficient third party game support to justify a majority of the installed base to purchase it (we estimate 30 third party games would be sufficient)," wrote Pachter in a note following last week's E3 conference.
"We do not see Project Natal as a Wii killer; rather, we think that Microsoft intends to introduce it at the same time as the launch of the Wii HD, and hopes to hold off Nintendos plans to encroach on Xbox 360 turf after 2010."
Project Natal incorporates motion control, voice and camera recognition, and was shown at E3 not only with basic game prototypes, but also as a demo with users interacting with an AI character.
But Pachter pointed to more integration of online services with Xbox Live as the company's most significant unveiling last week, as it adds Netflix, Facebook, Twitter and Last.fm to the console's offerings.
"We were most impressed by the companys clear enunciation of its strategy to turn the Xbox 360 into an internet and media hub for the living room, and we believe that the most momentous news of the press conference was the opening up of the Xbox Live dashboard to the internet.
"Among Microsofts many announcements, the company unveiled its intention to allow interaction with the Netflix website, to allow free streaming of FM radio through Last.fm, and to allow Xbox Live members to access Facebook and Twitter through the Xbox Live dashboard.
"These announcements demonstrate the power of Xbox Live as a web browser, and signal an intention to convert the 30 million plus installed Xbox 360 base before Apple TV can gain a foothold in the media hub market," he said.