Placing that device in the forearm would track the muscles that move hand and fingers.
So it would add finger tracking without modifying the rest of the HW.
To improve overall tracking precision and reduce lag, what's needed is simply higher precision camera and more computing power, that is Kinect 2 + XB720 or Kinect 2 + a PC powerful enough, or simply a Kinect 2 designed with enough computing power on-board (like the first prototypes, simplified to cut costs) and able to offer its features also to less powerful HW. Current Kinect performance can be increased a little both optimizing SW and subtracting console's computing power to other parts of the game, and, judging from people's satisfaction and fewer complaints about lag compared to the past, significant SW optimization must have already been done since launch.
Higher resolution and computing power should probably be able to track fingers too without that EMG armband, but the armband can track fingers also when they're hidden from camera's sight, so it could be useful also for future advanced Kinect HW capable of precise finger tracking.
Note: that thing can track finger movements relative to hand and wrist angles, but the camera is still needed to determine position and movement of the hand in space, so the precision of these measures is still tied to console and Kinect HW.
Note 2: prior art of the concept exists, so MS will be able to enforce its rights just on its own particular implementations.
Note 3: note 2 apply to countries with sensible patent laws and rules and a working and not sloppy Patent Office. In America instead there will be plenty of space for litigation, cross-licensing or reasonable fee settlements with large companies and wrestling smaller ones out of business or forcing them to pay undue unreasonable royalties to settle. Not MS' fault, anyway, it's just the US patents system that stinks as usual.
