Project Natal at E3

The biggest thing to come out of Microsoft's E3 keynote came last. Following much speculation about whether any motion-sensing technology would come to the Xbox 360, Microsoft did, in fact, announce such a system on Monday.

Microsoft Xbox Senior Vice President Don Mattrick unveiled the company's new full-body motion-sensitive controller, code-named Project Natal, which sits near the Xbox 360 console and allows users to control their games, movies, and other Xbox media without touching any hardware.

In its presentation, Microsoft showed off many different uses for Natal, including face recognition that automatically logs a user into his gaming profile, a game that allows a person to manipulate her avatar using her whole body, and a painting program in which a user can throw virtual buckets of paint on a canvas. In this part of the Natal demo, Microsoft showed off a project in the works with Lionhead Studios, in which a real person has a conversation with an animated boy named Milo.

See our full E3 coverage here.

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Stephen Spielberg at E3

Steven Spielberg (right) joined Microsoft's Don Mattrick (left) on stage to introduce Project Natal, speaking to its importance in introducing new demographics to gaming.

"I've been asking the crucial question: How can interactive entertainment become as approachable as other forms of entertainment?" Spielberg said. "The vast majority of people are just too intimidated to pick up a video game controller...Despite the size of (the video game) industry, still 60 percent of households do not own a video game console."

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Paul and Ringo at E3

Paul McCartney and Ringo Starr introduced an upcoming Beatles version of the ever-popular Rock Band video game franchise. "Beatles: Rock Band," due to launch September 9, will feature 45 songs from the Fab Four as well as never-before-heard live studio chatter from the members of the band.

Players will also be able to download Beatles songs and albums, beginning with the entire "Abbey Road" album. Proceeds from downloads of the song "All You Need Is Love" will be donated to Doctors Without Borders, Microsoft said in a statement.

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Harmonies on Beatles: Rock Band

The game will allow players to play along to Beatles songs on their instruments and do up to three-part vocal harmonies using multiple microphones.

It will also include a new set of hardware, replicas of instruments played by John Lennon, Paul McCartney, and Ringo Starr.

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Halo: ODST

Probably the most anticipated new Xbox game is "Halo: ODST (Orbital Drop Shock Trooper)," a prequel to the Halo franchise. The game, which takes place weeks before the start of "Halo 3," puts players in the role of a rookie solider separated from his team. Players will have new weapons to work with, including a new low-light vision mode.

The game is expected to be released September 22.

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Tony Hawke Ride

World-famous skateboarder Tony Hawk made an appearance to unveil "Tony Hawk Ride," a new skating game that features a skateboard-shaped controller. Players of the game will "ride" the board, allowing complex maneuvers and a more realistic skating experience.

Other games announced at Monday's keynote included "Metal Gear Solid: Rising;" "Final Fantasy XIII;" racing game "Forza Motorsport 3;" "Left 4 Dead 2;" "Tom Clancy's Splinter Cell Conviction;" adventure sequel "Crackdown 2;" "Shadow Complex," a new adventure game based on an Orson Scott Card story; and psychological thriller "Alan Wake."

Microsoft announced that it will soon make full games available for download on demand, saving gamers the effort of heading down to their local video game retailer or waiting for a new disc to ship.

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Twitter on Xbox Live

Felicia Day from the TV show "The Guild" showed off two new social features coming to the Xbox. Users can now send tweets and access the Twitter feeds they follow via Xbox Live.

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Facebook

The game console will also be integrated with Facebook, allowing an Xbox user to update his Facebook status, share photos, view friends' streams, and even post in-game screenshots from "Tiger Woods PGA Tour" to his Facebook profile.

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Last.fm on Xbox Live

Microsoft announced a partnership with Last.fm that will allow people to stream music from Last.fm through the Xbox 360. Users can manage their personalized radio stations by "loving" or banning individual tracks, have virtual listening parties with Xbox Live friends, and access customized soundtracks on Last.fm via their game consoles.

Xbox Live Gold members will be able to access the service for free.

(Disclaimer: Last.fm is part of CBS Interactive, which also publishes CNET News)

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Netflix

Microsoft is also making improvements to the way Netflix is accessed via Xbox Live. Users will now be able to add movies and edit their rental queues through the game console. And an instant play button will be added.

See our full E3 coverage here.

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