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Why Microsoft's Project Natal could revolutionize in-store media

Of all the announcements made at this week's Electronic Entertainment Expo, probably none has generated more buzz than Microsoft's Project Natal. Certainly, nothing at the show — which is, after all, focused on home entertainment — is so applicable to retail and so potentially game-changing for businesses.

Introduced at the show by Steven Spielberg, the Natal system purports to offer "controller-free gaming." The device itself is a nine-inch-wide black bar on a small base; nestled in the front are an RGB camera, depth sensor and a microphone. Much like a Wii sensor bar, it is installed in front of a screen, facing the user.

"Unlike 2-D cameras and controllers, Project Natal tracks your full body movement in 3-D, while responding to commands, directions and even a shift of emotion in your voice," the company wrote in a press release. "In addition, unlike other devices, the Project Natal sensor is not light-dependent. It can recognize you just by looking at your face, and it doesn't just react to key words but understands what you're saying."

Just look at this incredible demo video:

Here's a live demonstration of Natal in action, Monday morning at E3:

Now, the emphasis up to this point has been gaming, but of course it is natural to think what this could do for in-store digital signage and interactive displays. For the tip of the iceberg, look at the social shopping demo seen in the first video at about 2:20. And the voice recognition capability? That could totally reinvent the loyalty program.

The digital signage industry has relentlessly pursued audience measurement tools for several years now, and companies like GestureTek have pushed the boundaries of gesture-based interaction. But Natal is a technology to watch for two reasons: First, if Monday's demonstration is an accurate representation of how well it works, then it works extraordinarily well, and second, since the product is aimed at the consumer market, the company obviously thinks it has figured out a way to deliver such an amazing interface at a consumer-friendly price.

Stay tuned, because this might get very, very exciting.

UPDATE 6/4: The geeks over at Gizmodo got to take a test-drive of Natal, and have posted a ton of pictures and video. In the words of one reviewer: "My real movements translated exactly how I expected them to — the precise position, velocity — 90 percent of the time, no matter how ridiculously I moved, and some of the other 10 percent might've just been my own bad timing. But the result is a remarkable sense of control. Immersion."

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