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Squilliam said:

Actually the most significant difference is whether you're looking for latency or not.

No, the only point is whether you act or react. In a game like table tennis, you always see the white ball coming, and after a short while trying, you learn to precompensate because you know what is happening in the next second. You are therefore acting, by learning to precompensate the processing delay of the system. I've seen many people trying table tennis and everybody missed the shots in the first minutes until they automatically precompensated the lag by acting early (lag which was very noticeable for an outside observer, in the range of 250-300ms, but completely irrelevant to the player(s)). Kinect's table tennis, by the way, is a thoroughly enjoyable game - for about 20-30 minutes until you see how very simple and repetitive the game engine is performing.

Now the problem is games where you have to react, or in other words, you don't know what happens in the next second. Say a shooter where an enemy pops up from behind a cover. There is no way to precompensate a reaction with an early action here, because you just don't know. This will be Kinect's achilles heel, but we already knew that, didn't we?