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I think Natal will have a new console (basically just a rebranded, smaller 360) launched with it. Similar to the Gamecube-Wii transition except that the older console will also be compatible with Natal. Natal's problem is versatility (and possibly price), but those are addressable.

Sony is making a mistake in this, yes, it's also releasing very early. I doubt it will have a killer app or the sort of software support needed to build momentum for the peripheral.



A game I'm developing with some friends:

www.xnagg.com/zombieasteroids/publish.htm

It is largely a technical exercise but feedback is appreciated.