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"It looks as though the MagniEye is a lens that can be put on the Kinect to make the bundle of infra-red light smaller and so you will need less space to have fun!"
That would make it playable in larger rooms, from further away. You need to make the divergence of the infrared bundle bigger not smaller. Bad name for the product since you would need a wide-eye lens (zoomed out) to make it suitable for smaller rooms.
A magnifier lens would help with facial and finger recognition, but would make full body tracking impossible.
And wouldn't you need 3 lenses, 1 for the infrared emitter and 2 for the two cameras? Plus a software patch to line the 2 images up again and correct the distortion from the wide-eye lens. It doesn't sound like it will work very well.
