A lot of the arguments in this thread are humorously ignorant. Would this work in the market absolutely. Nintendo has almost sold twenty million copies of Wii Fit. What do we make of games like Rock Band or Guitar Hero. The reality is that peripheral games are thriving in the market. That thrashes built from the ground up argument. In fact the fact that the 360 is flexible enough that it could support multiple control schemes is a blessing not a curse. That means it can cater to more markets not less.
You cannot be narrow minded about the concept, and think how will I play Halo with this. The answer is you will not. In fact the demographic for this would be the casual market who has no desire to play such a game. They prefer party games, music games, trivia games, and arcade games. Your not going to see a lot of those games supporting this control, and if they have the option to use this control the chances are it will not be as fine as a hand held controller, but then again someone using this control would probably not be very good in the first place.
Anyway there is no barrier beyond the purchase price, and if it comes with a game then it will probably be an easy sell. Were it to be packed in once again Microsoft has a model for that. They just pack it in with an arcade unit, and call it the family pack. Hell they might not even have to raise the price if they omit the standard controller, and even if they do include the controller. All they will do is match the price of the Wii.
I think it is an interesting theory, and beyond the casual market this would have applications for other types of gaming. Provided it allows for customization. This would be good for slower paced information intensive games. Such as the likes of a Civilization, or an online role playing game. Where a control pad simply lacks a button. Hand gestures allowing you to call up menus on the fly with the off hand while the other hand is on a controller.
Hell just imagine Halo with head motion control. Just a slight tilt of the head carrying your view in that direction. Actually an improvement over dual analog.







