Natal isn't going to be a gaming interface for this generation. Its too late, theres litterally no point in it as a games interface (yet) because that application at this time doesn't make any sense, that horse has litterally bolted and Nintendo has everytyhing locked up nice and tight. It will be a gaming application, but first its going to be something else. If you step back for a moment, and look at the E3 presentation from another angle it makes the purpose of Natal at this point quite clear. All the demos they did for Natal really can only be applied to two distinct fields really.
The things that were shown and the type of interface Natal is, really only suits children initially. Most adults would feel like fools if they used that interface, but for children they would be right at home. Now im not talking games here, at least not in the strict sense, im talking about educational software. Natals paint program, Milo demo with the ability to read paper into the program etc all really point down this road at least initially. Microsoft have been spending a lot of time working on education applications for their other interface, surface.
See, I doubt that Microsoft are stupid and that they lack the ability to plan ahead or find a niche in the market. In Natals case the Xbox 360 is a platform for something entirely different from gaming. Education and childrens software is a very lucrative market. People are willing to spend thousands on their childrens education when they are unwilling to spend even $200 on a games console. Its all about utility, people are simply more willing to pay money for something which is useful vs something which is a luxury. The estimates of Natals current costing at $200 reinforces this further.
Im not saying that Natal is strictly an education interface, but that education software will likely be the keystone for them to break into the market. Microsoft needs a position of strength in the market to compete with Nintendo because at this point they are simply lacking the firepower. Any gaming use of Natal will build from the market base they build up within that niche, at least for the current generation of consoles. No console company can survive on the hardcore alone.
Lastly, don't take Natal at face value. Its unlikely you've seen the whole interface. The full picture likely involves some kind of true 3d interface, whether its from your TV or based on glasses that you wear. The killer application is tricking your eyes into thinking that instead of waving your hands in the air you're actually interfacing with something. Go back to the Burnout demo and imagine you were holding the steering wheel in your hand, or go back to the paint demo etc and imagine you were holding buckets of paint. Natal needs to be what it is for virtual reality and total immersion. However for games this application would be so far away that only Halo: Reach could possibly have enough clout to be the launch application for something like that and sustain the peripheral with the use of only a single game.
Tease.











