Reasonable said:
Oh I don't think Natal is 'banned' from peripherals, I'm just going by MS current positioning of 'no controller'. I half expect MS to quietly do an about face and produce some peripherals at some point post launch. My point is that in practise, people normally prefer to feel a physical connection - it just doesn't feel 'right' swining you arms and seeming to hit something with zero feedback. Try it right now and you'll see what I mean. Swing your arm as though playing Tennis - feels off, right? Swing your arm as though playing tennis holding something inert - feels better, right? Now, get access to a Wii if you don't have one, play Wii Sports and feel the rumble when you play Tennis - feels much better than the other two, right? You can't change that, as we're wired for physical feedback.
You're right on price though, if it's too expensive that will negate any potential impact vs the Wii, particularly with Wii getting a price drop.
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I don't think MS cares too much about the controllerless aspects of Natal outside of their marketing. They are basically handing Natal to developers and telling them to do with it what you will. Kudo has stated a couple time I believe about the possibilities of the Natal controller hybrid.
As far as feedback, sound and visuals are enough. People playing on PC with mouse and keyboard don't have rumble, and they seem to do alright.