Microsoft has unveiled Kinect, a controller-free gaming device for Xbox 360, previously code-named Project Natal.

"It’s an amazing year just when you look at the things people are expecting," says Marc Whitten, corporate vice president of Xbox LIVE, who thinks 2010 could be the biggest year yet for Xbox. "But we’re excited to also be announcing ways that make it simpler for everyone to enjoy the things we do. People who are intimidated by a controller or game pad will finally get to unlock some of the experiences that are possible in the living room, gaming and non-gaming alike."

This video shows various things you can do with Kinect:

"You are the controller," says Mike Delman, corporate vice president of Global Marketing for the Interactive Entertainment Business. "You simply step in front of the sensor and Kinect sees you move, hears your voice and recognizes your face."

"Some people don’t like controllers," Delman said. "And Kinect makes the gaming and entertainment experience more organic and free-flowing, without any of the barriers that can sometimes keep people from participating."

The E3 Expo starts this week, and much more Xbox/Kinect news is expected to come out of that. More details about Kinect here.

Do you think the Kinect is a threat to the Nintendo Wii? Will it sell more Xboxes? Share your thoughts.