It seems that Project Natal may not shock Nintendo after all. According to Computer and Video Games, it turns out that Nintendo looked at an early version of the technology and rejected it three years ago.

3DV Systems, which created the technology and later sold it to Microsoft for the Xbox 360, is said to have pitched an early form of it to Nintendo in 2007. Satoru Iwata turned it down, because it was too expensive and too lag-prone. He also did not like the idea of messing around with the Wii handset approach and did not want to release it as a Nintendo peripheral.

However the camera technology was improved and flogged to Microsoft. The dark satanic rumour mill has been claiming that Redmond has had to scale back its ambition and move most of the motion processing work to the Xbox 360's main processor rather than having a dedicated chipset.

This will mean that a Natal peripheral may cost less than $80. We are expecting to see Natal ready this year.