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Lots of potential with the balance board. It's up to the devs to optimize its use effectively though.

Just as we've seen some pretty terrible examples of motion controls with the Wii remote, there is quite a bit of potential to completely screw up controls with the balance board as well.

The snowboarding/skiing demo in Wii Fit is very promising though (still more partial to "ski jumping" for the fun factor even though it's extremely simple).

The only problem I could see with using to board to control movement (walking or running around in a game) is the potential for liability. Nintendo doesn't want people running in place on the peripheral because it wouldn't be long before someone fell off and injured them self.

Why would I think this? Wii Fit running doesn't use the board. You jog in place on the floor and the remote acts as a pedometer utilizing the accelerometer.

I've been doing the "run in place" exercise for a week and I could not see myself running in place on the BB for 20 minutes (it would probably break the board after many hours of use), much less for a multi hour gaming session.

It could work very well for combat by using torso and body leaning for dodges and heavy strikes. Paired with the remote and nunchuk, there is heavy potential for a primitive form of full body control use.

It's all going to be in the implementation though, good or bad.