Watch it, share it, do what you like. And if you just want the short and sweet, here again are our five featured bits (shot and edited by Mike Short):

Steve Ballmer Exclusive Interview Series:
Part 1: Ballmer Talks Natal, Says Blu-ray Add-On for Xbox Coming
Part 2: Ballmer on the Smartphone Race: "It Doesn't Matter What the Critics Say"
Part 3: Ballmer on Zune: Sometimes You Get It Right The Third Time?
Part 4: Ballmer on Those Crazy Ballmer YouTube Videos
Part 5: Ballmer Optimistic About Win 7, But Says Vista Is "Very Popular"

When I asked Ballmer about adding Blu-ray to the Xbox, he said:

Well I don't know if we need to put Blu-ray in there—you'll be able to get Blu-ray drives as accessories.

Though he says it with certitude, the timing of any kind of Blu-ray accessory is unclear. Could he have mispoken? Certainly. However, when I asked Xbox spokespeople about Ballmer's revelation, they responded:

Our immediate solution for Blu-ray-quality video on an Xbox 360 is coming this fall with Zune Video and 1080p instant-on HD streaming. As far as our future plans are concerned, we're not ready to comment.

Microsoft PR is good — we trust them to say no if they're not making one, and in this case, the best strategy is a "no comment". Which turns out to be a comment.

Of course, his Blu-ray comment may not mean that Microsoft is coming out with an external drive—he may have just been shooting down the idea that the Xbox 360 will ever have an internal Blu-ray drive, by saying that any Blu-ray the Xbox gets would have to be external. On the other hand he did actually say, "You'll be able to get Blu-ray drives as accessories."

As you can see in our back-and-forth, Ballmer plays his cards close to the chest, but in my sit-down interview with him, he shared a lot. Prior to the Blu-ray business, Ballmer and I talked about Natal, and the excitement that Matt and Mark experienced when they stepped into the chamber back at E3. When I asked him if Natal was Microsoft's attempt to do away with concept of game console generations (thereby prolonging the life of a given platform indefinitely), Ballmer smiled knowingly and said "We'll see."

Stay tuned for more exciting Ballmer moments (and facial expressions) over the next day, and then the full uncut interview video on Friday. Video by Mike Short

Steve Ballmer Exclusive Interview Series:
Part 1: Ballmer Talks Natal, Says Blu-ray Add-On for Xbox Coming
Part 2: Ballmer on the Smartphone Race: "It Doesn't Matter What the Critics Say"
Part 3: Ballmer on Zune: Sometimes You Get It Right The Third Time?

So, I won't be surprised if it's $150, or even more, honestly.

The name of the game is multitouch. The Applied Sciences Group at Microsoft—who helped create with Natal—are basically researching hand-cradled versions of the laptop trackpads and camera gesture systems that are evolving in parallel elsewhere. Though large populations of computer mice may be dying out because buyers prefer laptops over desktops, the mouse still roars in gaming and artistic fields.

The irony is that Microsoft's reveal of these concept mice comes on the heel of Apple rumors that a new, multitouch Mighty Mouse is on the way to market. Regardless, before Apple lets its mouse out of the bag, take a look at these, because there's a lot going on here:

• Cap Mouse - So named because it's capacitive touch, it's possibly the most completed concept design, mapped with a series of sensible gestures, not just momentum scrolling and pinch zooming, but even thumb flicking to shift photos and toss windows around the screen. The designers made a conscious decision to leave the click mechanism in place, because, like on the MacBook Pro trackpad of their arch-competitor, that physical clicking reduces user confusion. In the video below, you can see the finger activity in the window on the left, while you see the results on the right:

• FTIR (Frustrated Total Internal Reflection) Mouse - Loser of the "coolest mouse name" competition here, this one uses an infrared camera that's gauging the positions of fingers on a curved acrylic surface. The amount of finger positioning you could see on this baby was astounding, though it probably isn't economical to use full-rez video of hand positions as a control.

• Orb Mouse - It's similar to the FTIR but with a semi-sphere where the hand rests. The team mapped gaming commands to demonstrate how regions of the sphere could control different pieces of an app. Something about that sphere makes sense, like it would be easier to remember gestures at different clock positions or something.

• Arty (Articulated) Mouse - A smart low-bandwidth multitouch concept, it basically makes sense of assorted pinching gestures. There's no camera, instead, the two finger pads each have a little mouse tracker in them, and the system measures how all three "mice" move relative to one another in order to fire off commands.

• Side Mouse - This strange half-mouse has a tracker and clicker, just like mice have had for eons. But it also has a camera that looks forward, interpreting what your fingers are doing and why. The beauty is that it's basically a Natal for your hand—you can even set it a foot away, and gesture at it with both hands, if that's what an app calls for. The catch is that when you are using it, you have to rest your fingers on the table, and it's apparently a bitch to program around all of that involuntary hand movement.

I couldn't help feel a bit sad when talking to these brilliant guys about their mice. After all, even though I used to be a huge mouse fanatic, it's been years since I've used one. Perhaps it's laziness or forgetfulness, or my couch-friendly work habits, but I do get the feeling the mouse's days are numbered. Am I wrong?

Update: Video the research team made, complete with soothing ambient music, showing how each mouse works. Take a look:

Still only mini game demos though, and we won't hear much more until the Tokyo Game Show on September 24. Hopefully we'll get to see some live demos of real games, along with a finalized name and date to expect it in Spring.

Also See: How Sony's PlayStation Motion Controller Works

Designed by Korean firm D'strict, the tech is a combination of infrared motion sensing and 3D imagery, pretty much like Microsoft's Project Natal. It's not quite as seamless as Natal, but given that it's main purpose is just to add a little flash to a cellphone announcement, we're awfully impressed—and distracted. Check out the video below for a clip of one of the announcements, and you'll see what we mean. [Fast Company]

Samsungmobile Jet making film from d'strict on Vimeo.

Says Sony Europe's Head of Developer Services, Kish Hirani, the Eye will have the ability to "detect gender and even the age of the face, separate facial features such as the nose, eyes and ears, and even detect whether you're smiling or not."

And taking a page from Microsoft's Natal platform, Hirani said the Eye will also support "skeleton tracking."

Now, I'll admit, these are cool features, but I do hope the update allows the PlayStation Eye to work in the dark. Facial recognition firmware update or not, for this to work Sony's going to have to figure out a way for this forgotten gadget to function from within the pitch black confines of people's storage closets and attics. [Gamasutra Kotaku]

This isn't the motion controller wand we saw at E3. It looks a little more like Microsoft's Project Natal, except you'd actually be using physical objects—anything you had lying around—as a motion controller.

The object (demonstrated in the diagram by that U-shaped-looking thing) is mapped into the system by rotating it in front of the camera, and saving it as a file.

If this sees the light of day, I give it 24 hours until we see the first YouTube video of someone playing Killzone with their Chihuahua.

I also wonder if Sony will comment on this patent when it coughs up more details on its E3 announcements at the Develop Conference on July 14.

[Siliconera via Kotaku]

Broken by Kotaku, Sony met with developers to better explain their motion controller follow E3. Here's what was passed along:

• Spring 2010 release schedule (still no price)
• Four motion controllers can be tracked at one time
• The PlayStation Eye will support voice input/recognition, face/head tracking
• Sony would like to combine motion controller and Dual Shock gameplay
• Motion control sucks some PS3 horsepower, so developers will need to accommodate it

While Sony has been developing all the aforementioned technologies for some time, we can't help but see a few capabilities pointed out here—voice/facial recognition/tracking—that were neglected in Sony's E3 presentation. Is it possible that the positive response to Natal has made Sony reassess which components of their system are most marketable to developers? Yeah, it's possible. [Kotaku]

The new device will be equipped with technology that is "really, really, close" to an actuality. The console, which was described as having a "natural interface," will have a built in camera with the ability to recognize movement and voice.

This, of course, is referring to Project Natal—and it backs up earlier rumors that a new console would debut in the fall. But the question remains, are we really talking an entirely new console here or simply some sort of bundle? As you might recall, Microsoft's VP of Interactive Entertainment John Schappert referred to the Xbox as being "less than halfway done" earlier this month. So, things are a bit confusing at the moment.

UPDATE: Microsoft has responded to the Ballmer statement, reiterating that the Xbox is not even halfway through it's life cycle.

As the Xbox team stated at E3 two weeks ago, we are not even halfway through the current console generation lifecycle and believe Xbox 360 will be the entertainment center in the home for long into the next decade. Project Natal will be an important part of this platform, but we have not confirmed a launch date at this time.

[TG Daily via Crunchgear]

...in addition to built-in Natal tech, a key feature of the next Xbox would be full HD stereoscopic 3D visuals similar to 3D movie theatres.

And that's everything they said on the matter.

So while the Xbox 360 would be getting Natal, the Xbox 720 (or whatever you want to call it) could have Natal and 3D immersion. TeamXbox claims that the 720 won't be launched until 3D television solutions go more mainstream, which by my guesstimation won't happen within four years.

Still, with Hollywood's focus on 3D, it's not hard to believe that Microsoft would design their home entertainment console to match—even if the risk would be huge.

But for now, this is all just rumor. If TeamXbox's portable Xbox story comes to fruition, we'll allow ourselves to get a little more excited. [TeamXbox via Maxconsole]

The rumor states that Microsoft will be debuting a totally new console that will include native Project Natal support, full backwards compatibility with Xbox 360 software, and with slightly updated muscle to handle newer games. Supposedly, it'll be released in fall 2010.

Microsoft did mention that with the debut of Natal, the Xbox 360's lifespan is "less than halfway done," but we think it'd be a mistake to release a game-changing new control system as an entirely new console rather than a more affordable peripheral when we've seen that a peripheral is all that's needed to handle Natal. Further, the way Microsoft has phrased talk about the Xbox 360's lifespan implies to us that the humble white console is going to be around for awhile: "There's still an awful lot left we can do with that piece of hardware, so we're going to continue to do that," said Microsoft's VP of Interactive Entertainment John Schappert.

We don't think the rumor really makes sense, but maybe it's just wishful thinking; we don't want to have to buy an entirely new console, but we just might have to if that's the only way to get our hands (well, our entire bodies) on Project Natal. [1UP]

Microsoft's initial announcement was prerecorded and very controlled, and our early hands-on experiences couldn't be filmed. Microsoft loosened up tonight, letting Fallon and, uhh, Jim from The Office jump in and out of Natal's sensor area to take control of live demos on national TV. As a segment, it was a little awkward, even in the context of Jimmy Fallon's show. As a tech demo? Drawn large across a 108-inch Sharp LCD, Natal came off as a tiny bit glitchy, but otherwise fantastic. [NBC]

That means the Xbox 360 will live twice as long as the original Xbox, which essentially had four years before the Xbox 360 arrived and Microsoft unceremoniously dumped it. That's 8 years. The original Xbox does still live in other ways, though—Schappert said that "hundreds of thousands" of people still play Xbox Live on it. Similarly, Live will obviously live on in whatever comes after the Xbox 360 he said. He reiterated again, though, that "there's still an awful lot left we can do with that piece of hardware, so we're going to continue to do that...I don't even think we're halfway through the life of the Xbox 360." He continued, "if we were not able to reinvent the interface, introduce avatars, introduce new services, we might be talking about new hardware right now." When "we need new hardware to deliver new experiences, that's when we'll start talking about new hardware."

One thing we obviously missed at E3, given how broadly Microsoft has expanded the Xbox 360's scope was the "game-changing" Zune integration promised in the Zune HD announcement. Schappert said that "game-changing" was "meant to refer less to games and more to our Zune video launch." Zune audio on the other hand, he had nothing to say about: "We're not announcing anything else right now, but obviously we're gonna continue to partner with our Zune friends. What you see today is a lot different that last year, so you're going to continue to see us innovate, bring new things, bring new experiences."

So that deeper Zune integration, it's coming. Eventually. One day. Hopefully. Maybe. [Giz@E3]

Matt Buchanan tested Project Natal today, as did I. Here is his personal take on the technology right alongside mine. We did not share our independent experiences before pasting the text below. Neither of us were allowed to shoot what was happening on screen—hence the crazy pics of our bodily reactions, and that intensely audible racing-game video.

How Natal Works
The test system was an ordinary Xbox 360, connected to small PC and camera that simulates the final Natal rig. There are two cameras—one RGB, for face recognition and display video, and one infrared, for tracking movement and depth. Why infrared? The eye doesn't see infrared light. And when you combine an infrared camera with an infrared emitter (also part of Natal), a room is flooded with a spectrum of invisible light that works in the dark.

Natal also has its own internal processing system handling an unspecified amount of the heavy lifting behind Natal's cleaver image and speech recognition. It breaks the human body into 48 points tracked in real time, and it can sense your whole body in Z space, or depth. In fact, on a heat map that measured depth, my hands appeared hotter than my shoulders—because they were closer.

Natal is so smart, in fact, that, if your room is narrowed by a pair of couches, it can signal to a game to narrow the level. It can see about 15' x 20' of a room, according to project leader Kudo Tsunoda's informal estimation.

Breakout
Matt: My first taste was talking to the father of Project Natal, Kudo Tsunoda and watching as his simple, small hand gestures were mapped perfectly onto the screen. He started up the ballsmacker demo you might have seen in our liveblog, knocking a swarm of balls into wall with every part of his body.

When Kudo gestured to me try it, I jumped right in and immediately started smacking at balls with my hands and feet and knees and arms and head as one ball exploded into many, like a virus, until I was doing sad white ninja jerking and jumping movements. Kudo didn't tell me how to "set it up" or what to do. I just did it. You have to realize, Kudo towers over me. I didn't have to calibrate it to my body size, or stand in a weird way for it to adjust. It just worked. Well, until I broke it at the end—it froze up after a few rounds and had to be rebooted for Mark. Hey, it's an early tech demo, so don't read into it. Until that point, it worked remarkably, incredibly well—better than I expected, honestly. The bright fluorescent lights were turned off and on, and Natal didn't flinch. 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.

Mark: Microsoft loaded the 3D Breakout demo we saw at their press conference. I stepped up to a white piece of tape right after Matt, and given that I'm 4 inches taller, Natal needed to account for my larger size.

After about 10 seconds, the blue, ghost-like figure filled in. And he was both taller and bigger-handed than Matt's avatar. Natal noticed that I'm a bigger guy. It made no adjustments for the fact that I'm also better looking.

The first thing I noticed was a slight lag I hadn't intended. It's not horrible, but my avatar moved a hair more slowly than I did. That didn't stop me from reaching up, spiking the imaginary ball at a wall imaginary bricks, and then flailing around to keep up with 2, 3, 4, 5 and more spheres flying at me at once.

My avatar recognized both my pitiful kicks and swipes. And while my avatar never left the ground when I jumped, this turned out to be but an animation limitation within Microsoft's tech demo. My wireframe preview image and heatmap did leave the ground. Besides, this is nitpicking. On the PS2 I played Nike Kinetic, something a bit similar. And I always wanted to be having fun. But on Natal, even in a stuffy windowless room surrounded by Microsoft execs, I was having fun. (Disregard my stern, focused face in these pictures.)

Burnout Revenge
Matt: The Burnout racing-game demo was a little more abstract—in one sense, I almost wished I had a wheel to turn, a pedal to press, because I wanted the feedback. I had trouble getting used to "pressing" the gas, which you do by moving your right foot forward. I threw myself off-balance by taking a ginormous step toward the Frankenstein's lab of demo equipment along the wall (upon which I could see myself represented in infared, covered in boxes like smallpox). But turning my air steering wheel, I felt completely in control. A lot of that was the software—it registered even the smallest pivots of my elbows that sent my forearms right or left—but the way it responded exactly how I expected it to is what made it feel so natural. Which is the real key here. It feels natural.

After I hit full speed on a straightaway, I tried to do a 180. I crashed into a wall and died. Normally, that'd make me bad. But I couldn't stop smiling that I'd held the future of gaming control in my hands—and it was simply air.

Mark: As soon as Matt crashed, I greedily jumped in, asking him if it was OK but not waiting for him to answer. I wanted to play Natal more, and I've played a ton of Burnout.

Burnout showcases a few important points for Microsoft. First, it's a real game that's been on the 360. So Natal doesn't weigh down on the processors so hard that you can't play games. Second, it requires fine motor control.

I raised my hands in the air, mining a steering wheel. I hadn't given the system any time to scan my body after kicking Matt out, but I stepped by foot forward, signaling the gas all the same. The car accelerated. I twisted my arms. The car turned just the right amount.

Microsoft had clearly tweaked the Burnout code a bit, forcing the car to feel a bit more like a powerful sedan than a street illegal beast out of some Fast and Furious sequel. And I'm guessing that Natal's ever so slight control delay was masked by the feeling of a looser-driving steering wheel that we find in more standard cars.

So I floor it, growing confident as I wave through traffic and slowly build speed. I reach maximum velocity, throw my foot back to break, cut the wheel and toss the car into a spin. Yes. This feels right. Just right.

Holy shit.

But Natal can't work this well. It just CAN'T. I need to break it, teach this Microsoft prototype a little humility. What if I stand on my tip toes and steer eight feet in the air?

The car handles fine.

What if I kneel on the ground and steer?

Yup, it still works, save for a moment when my knee shifted and I tricked the machine—a fair mistake, even by my highly ridiculous dork standards.

Closing Thoughts
Matt: Project Natal is the vision of gaming that's danced through people's heads for decades—gaming without the abstraction of controllers, using your body and natural movements—which came more sharply into focus when Nintendo announced the Wii a few years ago. I haven't been quite this blown away by a tech demo in a long time. It looked neat onstage at Microsoft's keynote. Seeing it, feeling it in person, makes me want to believe that this what the future of gaming looks like—no buttons, no joysticks, no wands. The only thing left to get rid of is the screen, and even that'll happen soon enough.

Mark: 2010...or maybe even 2011...is just too long to wait. I want Natal now.


Kudo Tsunoda Testing Natal:

Talking to Marc Whitten, Microsoft's Xbox Live General Manager, he's happy to show you last.fm, Sky, Facebook or Twitter, the latest services to be announced for Xbox Live. But these are just updates, part of Live's slow evolution to...something bigger. And you can see that in Whitten's body language when he hears "Natal." He goes from somewhat stiff and professionally cordial to shifting restlessly in his seat with sparkling eyes, like a kid who just wants to get back to his favorite toy.

As it happens, Natal is precisely what Microsoft's Xbox 360 Live team is and has been working toward since at least the development of NXE (though surely earlier, especially from a pure hardware perspective). And according to Whitten, it's the last step of Live.

You can have an amazing Live experience without Natal and you can have an amazing Natal experience without Live. But the magic, the endgame, the place that we're going in this social world in the living room is [Natal and Live] tied together. We spend a ton of time on how we're going to reimagine the future with this idea of controlerless gaming and Live together.

To be fair, "endgame" was my word originally, but Whitten, a man ever so careful with his diction, couldn't help but to use it. He sees entertainment and communication converging on Live, and he sees Natal as the way to assemble it all in your living room.

Indeed, if Natal works as well as advertised it's hard to see the technology, the idea, as anything less. You know, at least until we get the holodeck. [Image]