Microsoft unveils Kinect Motion Controllerý

In a performance conceptualized by Cirque du Soleil, the company staged enactments of how games would be played. Those included a track and field tournament, a driving simulation in which passengers rock their bodies to toss the car into cartwheels, and a Star Wars game with enhanced control of a Jedi knight - which drew cheers.

Microsoft did not announce game publishers for Kinect — previously dubbed Project Natal — nor divulge any other details. LucasArts releases Star Wars titles.

The world’s leading gaming hardware makers, hoping to reignite the slumping $60 billion industry by expanding it beyond hardcore games to more casual players, will unveil at the E3 Exposition in Los Angeles this week a range of futuristic gadgets.

Microsoft is expected to flesh out details of its Kinect system at the annual games convention, which along with Nintendo’s 3D-without-glasses platform is expected to generate the most buzz.

Sony Corp will show off its competing Move motion-sensor.

Microsoft — which recently lost its mantle as world’s largest technology company to Apple Inc — unveiled Natal at last year’s E3. Analysts estimate the three-camera device, which will be in stores by this holiday season, will range from $50 to $200.

The set-up — which allows for completely hands-free games and controlling the console with voice commands — is designed to appeal to casual players and newcomers who may not be aware of the product, rather than hardcore gamers, analysts said.

“There’s only so much headway you can make until you bring moms into the equation. There’s lots of kids and moms who want to have an interactive experience together,” said Mike Delman, vice president of global marketing for Microsoft’s interactive entertainment division.

The rush of new technology comes just as the video game industry, which dwarfs the $10 billion domestic movie box office, needs it. Total U.S. industry sales — hardware, software and accessories — are down more than 10 percent to $4.7 billion this year through April, according to retail research firm NPD Group.

Delman estimates that, of the 40 million Xbox gamers around the world, up to 30 million were considered “hardcore”, with another 10 million drawn by more mainstream games such as “Madden” football. Microsoft hoped to draw in tens of millions more with Kinect, which relies almost exclusively on body motions and gestures, he said.

Among other games demonstrated on Sunday were a full-interactive instructional dance video, a virtual pet simulation featuring four furry felines including tiger and lion cubs that players can stroke and train, and a serenity-inducing yoga-taichi exercise game.

Five years after its launch, there are more than 40 million Xbox 360s in homes and 23 million paying subscribers for Xbox Live, according to Microsoft.

In a best-case scenario, Natal could extend the lifespan of the machine another four or five years, potentially boosting the number of installed consoles to 60 million to 70 million, Wedbush Morgan estimates.

Typically by the fifth year of sales, hardware demand crests, but software sales are fueled by a base of users.

Microsoft’s ambition — despite its spotty track record of engagin consumers outside of gaming — is to make the Xbox the nexus of household entertainment. It already offers Netflix movies and Zune music and videos through its Xbox Live online subscription. There has been talk that it will add Hulu TV shows to the service at E3.