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Squilliam said:

As far as the cost consideration goes, you would have to consider that Natal has PC, Xbox 360 and TV applications (I have seen a tv demo) so through shipping a large quantity they can bring the cost down and Gem is no slouch as far as cost goes either as you're looking at likely two wands plus a fairly sophisticated camera. They are likely to both cost a fair bit and probably similar in comparison to each other but different in how they expended the resources in their implementation.

If the Sony thingie does not contain rumble features, then it is a plastic stick with a few buttons, a led in a ball, an ir-emitter, a custom ic and a battery. Around $10 to manufacture in large quantities. The RGB camera might be the eye-toy thing (another $15) or a higher-resolution camera (add $2-3). Now for the Natal bundle, the bill looks _far_ longer than that. You have the same cheap RGB stuff for visuals, but then the fun starts with the TOF camera stuff: the tof-chip, the (programmable?) precision tof-chip controller, ir pulsed diode, ir bandpass filter, memory interfaces (for both cameras), processor  (lowcost triple core ?), memory for images, (lots of) memory for the software, power supply and whatnot. If you bought the tof stuff now as a single unit, you would have to fork over around $8000. Obviously, mass manufacturing will bring those costs down considerably, but >95% (not counting the software) ?