By NICK WINGFIELD

Microsoft Corp. is developing a new videocamera for the Xbox 360 console that will allow players to control games with the movement of their bodies, people familiar with the matter said, an effort to attract the casual players who have fueled Nintendo Co.'s recent success.

The Microsoft device is a twist on Nintendo's blockbuster Wii game console, which allows users to swing a tennis racket or other equipment in games by holding a plastic wand in their hands.

Unlike the Wii, the Microsoft camera won't require users to hold any hardware to control on-screen action, the people familiar with the matter said. The camera would sit near the television and capture when players move their hands, legs or head.

A spokesman for the Redmond, Wash., company declined to comment.

The camera represents another effort by the games industry to reach out to consumers with more intuitive playing methods than traditional game controllers, with their array of joysticks and buttons.

Microsoft's camera uses 3-D technology, which gives players more accurate control over games than earlier game cameras did, the people said.

The potential move suggests Microsoft is stepping up efforts to gain ground on Nintendo, the leader in the market for the current generation of game consoles. A spokeswoman for Nintendo declined to comment.

Although Nintendo recently signaled that demand for its Wii may start to slow, it sold 601,000 Wii consoles in the U.S. in March, more machines than Microsoft and Sony Corp. combined, according to NPD Group, which tracks retail sales.

The Microsoft camera could be unveiled as early as the E3 videogame industry conference next month, though it likely won't be released until next year, the people said.

Microsoft, which saw revenue in its games division fall 1.6% to $1.57 billion in the latest quarter, is likely to sell the camera first as an accessory and could ultimately bundle it with the Xbox 360, a person familiar with the company's plans said. Pricing couldn't be determined.

The camera is based on technology that Microsoft developed. Microsoft also recently acquired an Israeli start-up called 3DV Systems Ltd., which has developed a 3-D camera and holds related patents, according to a person familiar with the matter.

In an email, Zvika Klier, chief executive of 3DV Systems, said "unfortunately I can't comment on the rumors surrounding this deal. ...We will provide more information when we can."

[via WSJ]