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According to good old Kotaku, the rumor is Microsoft will buy the controller from Motus. In other words, spend money in leu of actually innovating anything, which is after all, the Microsoft way.

http://www.kotaku.com.au/games/2008/04/microsoft_rare_gyration_talk_360_wii_remote_rumors-2.html

Back in April many others were spouting the same rumor. Google Motus + Microsoft and you can have all the speculation your heart could desire. But yes, apparently it was originally developed by Motus for the PC.