Microsoft’s Wii-killing, motion-sensing Xbox 360 add-on set to debut at E3. The new Xbox 360 motion sensing system is based on the ZCam 3D camera, made by a company that was later purchased by Microsoft.

ZCam is completely different from the EyeToy or any other normal 2D webcam. Zcam 3D tech is capable of tracking both big movements and tiny gestures. It has sensors that are able to measure the depth for each of the captured pixels using a principle called Time-Of-Flight and detects 3D motion and volume down to 0.4 inches, capturing at the same time full color, 1.3 mega pixel video at 60 frames per second.

Furthermore it can capture video with depth information and recognize individual finger movement and of the video and track player body movement. Players themselves don’t have to hold any gloves or any other external device.

Source:http://www.3dvsystems.com/technology/tech.html