The headset works in a similar way to voice recognition, in that it must first be calibrated using Emotiv's software to recognise patterns in the user's electrical brain impulses, which are used to perform 30 preset actions. When the player performs those same thoughts in the game the software knows to associate them with the correct action, such as rotate object or push object.

"If you look at the way we communicate with machines up to this day, it's always in a conscious form, so whether you turn on and off the light or you program software you always consciously tell a machine to perform a task for you," Emotiv CEO and co-founder Nam Do said in an interview from the company's Pyrmont offices. "But the communication among ourselves is much more interesting because we have non-conscious communications, so we read body language, we read facial expressions and we also have feelings and emotions which differentiate us from machines. "Our vision for the next generation of man-machine interface is it's not going to be limited to just conscious [interaction]."

While the headset will work in a very limited sense with existing titles, Do said the major game developers and publishers were designing a number of their upcoming titles to take full advantage of the technology. For instance, an in-game avatar would be able to mimic the human player's facial expressions - smiles, winks, grimaces, and so on - in real time, and other non-human characters in the game could respond to these.

"If you shoot somebody and you're smiling, the non-player character can turn around and say to you, 'What are you laughing at? You just killed that dude,' " Do said. The headset could also detect the players' emotions - whether they're bored, angry, engaged, happy, stressed, etc - and adjust difficulty levels, in-game music and the game environment accordingly. Characters could also react to a player's emotional cues.

In horror-themed games, enemies could intelligently select the perfect time to startle a player based on how they feel, rather than having opponents in the same positions every time a mission is reloaded. But the most powerful aspect of the EPOC is its ability to detect thoughts. Players can just think about performing actions, such as lifting or pushing objects or making them disappear, and have the game act accordingly without the need to push any keys or buttons.

All of these features have been publicly demonstrated to thousands at gaming conferences using a role playing game developed by Emotiv. It will be included for free with the headset and was trialled in Sydney by smh.com.au. Do, who came to Australia from Vietnam in 1995 on a university scholarship, said his intention was not to replace the keyboard or traditional game controller; he simple wanted to add another layer to the experience. "You can still move around using your joystick, using your keypad, using your mouse and keyboard, just like a normal game, but there is a lot of activity that we take to another level by adding a headset - such as being able to levitate an object by thinking about it," he said.

Do said the company was first concentrating on the larger US market - which has about 9 million hardcore gamers - but was working with Australian resellers and distributors to launch the product here. Regardless, Australians would be able to order the headset online from US retailers or from Emotiv itself.

"We're working very hard to get the headset to other markets at least by online ordering," Do said. He said that, while the company was initially focused on gaming, the technology had applications in any situations where humans interacted with machines, such as in medicine and robotics. Further, market research companies and even Hollywood studios were tapping Emotiv's technology to measure reactions from focus groups. Emotiv spent two years developing its technology in Sydney before moving its headquarters to San Francisco, the home of Silicon Valley, in 2005. It employs about 50 staff - neurologists, biomedical scientists, mathematicians, engineers - but its entire research team is still based in Sydney.

Moving to the US, Do said, meant Emotiv was "closer to all the action, all the [big gaming] companies, all the clients and also access to money, because, as a start-up company, money is always one of the key considerations". He said Emotiv had been approached by numerous suitors keen to acquire the company, but wanted to first see how far the technology could grow. Emotiv has also had meetings with the major game console makers about licensing the technology to them for future products.

In addition to Do, Emotiv was founded by 1998 Young Australian of the Year Tan Le; Neil Weste, a neuroscientist who sold his chip manufacturing company Radiata Communications to Cisco in 2000 for $US295 million; and Allan Snyder, the director of the University of Sydney's Centre for the Mind and winner of the 2001 Marconi Prize. The four founders self-funded the initial $1 million needed to start the company but have since raised $US14.5 million in series A funding. It is now in the process of raising series B funding.