3DV buy could give Xbox a stronger punch

Microsoft may be poised to boost the Xbox unit with a simple wave of the hand.

The software giant is reportedly close to buying Israel's 3DV Systems, an Israeli start-up whose technology allows a gamer to control a system through nothing more than a hand gesture. (See video below for a CNET video demonstration of the technology.)

According to a report in the Israeli newspaper Haaretz, Microsoft may be willing to spend around $35 million to acquire the company and its technology, which uses a depth-sensing camera to record a gamer's motions. The newspaper also noted that the price tag would be less than the amount of money the company has raised to date from backers, including Kleiner Perkins.

3DV showed its plans for the technology in December 2007, but has yet to announce a partner that will bring the technology to the masses, although Microsoft has used the systems on a small scale in its research labs. More recently, 3DV has been in talks with a variety of hardware and software companies in an effort to try and get the technology onto the market.

A source familiar with the situation indicated that talks with at least one company have progressed beyond just talks, with details getting down on paper.

Neither 3DV nor Microsoft would comment on the Haaretz report or discuss how far discussions might have progressed.

"We have had many conversations/meetings/technical evaluations with many partners from software developers to hardware manufacturers but I am unable to discuss any specific company, due to non-disclosure commitments," 3DV executive vice president Charles Bellfield said in an e-mail interview.

Although Sony and Microsoft thought they would be in a two-horse race in the console market, it has been Nintendo that has been winning this generation in large part because of the Wii's intuitive interface.

Microsoft has talked about ways of adding more natural interfaces to the Xbox, even within this generation of consoles.

Speaking at the 2007 D: All Things Digital conference, Microsoft Chairman Bill Gates suggested that Microsoft was thinking along the same lines as 3DV in terms of where gaming was headed.

"Imagine a game machine where you're just going to pick up the bat and swing it, or the tennis racket and swing it," Gates said.

Moderators Walt Mossberg and Kara Swisher mocked Gates, saying such a technology already exists and it's called the Wii. But Gates disagreed. "No, that's not it. You can't pick up your tennis racket."

He later added, "You can't sit there with your friends and do those natural things," he said. "That's a 3D positional device. This is video recognition. This is a camera seeing what's going on."

Acquiring 3DV could move that vision closer to reality.