Last year, there was some speculation that Microsoft's IllumiRoom project, which uses a Kinect and a projector to extend a game world from the confines of the TV screen to the rest of the room, would be used with the Xbox One. Microsoft later explained that the technology was too expensive to include with a home console, but the company didn't stop working on it.

A new video posted to YouTube by Microsoft Research shows the progress it made with IllumiRoom, now called RoomAlive, which doesn't even use a TV. Instead, the new prototype uses a Kinect and a number of video projectors to scan every surface in the room to turn it into an "augmented entertainment experience."

It can project images to fit surfaces, and allow players to interact with them by detecting their movements. In one part of the video, you can see a user playing whack-a-mole, chasing a creature around the room, and in another we can see a how a gun can be used to fire at targets as they pop up on different walls.

"In the future we will explore approaches and experiences that involve multiple users and multi-user viewpoint rendering," the team that created RoomAlive said. "We will also explore new ways to increase immersion with spatialized sound. RoomAlive provides a glimpse of how a scalable multi-projector system can transform any room into an immersive augmented gaming experience. Many new and exciting possibilities remain to be explored."

What games would you like to see take advantage of this technology? Let us know in the comments below.