The rumors, leaked images, and speculation are only going to get worse as we move closer to E3, and now it's Microsoft's turn to bear the scrutiny of the gaming press. A report making the rounds, along with a "leaked" photo from Engadget, seems to show a type of sensor bar that will allow gamers to control their games using only their body. You don't have to hold any hardware, there is interaction with both video and sound, and the system is able to focus on the player and ignore the rest of the movement in the room. How likely is this rumor? Very. In fact, we think we already saw and demoed the technology... last year.

Microsoft is making it clear that the company will have big things in store for E3. “Microsoft is gearing up for a big presence at E3 which will completely transform how people think about home entertainment," Don Mattrick, senior vice president for the Interactive Entertainment Business at Microsoft, said in a statement at the beginning of the month. European executive David Gosen also hinted that E3 this year would be "gaming changing." It seems that people are comfortable with big promises, on the record.

So what fits the description of the technology according to the leak? At CES last year we met with a company called 3DV that showed off a small Web-camera-like device that was able to detect movement and interaction in 3D space. We even played a boxing game that worked very, very well. Even more impressive was the ability to control media functions with gestures. You could swipe your way through your movies, interact with pictures, change channels, all with a small camera and your arms. Imagine a Microsoft Surface—without the Surface.

In my years of covering games I've sat through literally hundreds of briefings and tech demos at trade shows, and what impressed me about 3DV was how real the technology was. Most companies are all show and no go at trade shows, but 3DV had a camera I could pick up and look at. They had a game I could play, as well as demos of the user interface functions. It was all there, and it was all working. "We're going to be launching comfortably in the sub-$100 area," Tomer Barel, VP of Marketing and Product Management for 3DV, told us.

The 3DV camera does everything the new Microsoft rumor suggests. So is there a connection? Of course there is. In February, Reuters started talking about reports that Microsoft was buying the company, and chief among the uses for the company's ZCam were gaming and teleconferencing applications. Sound familiar?

Every feature discussed in the Engadget report—every single one—we saw in action in January 2008, by a company that Microsoft was reported to be in talks to buy, using sub-$100 technology that was mature more than 15 months ago.

If Microsoft is going to be showing its own version of the ZCam hardware, it could be bringing motion control that, in our time spent with it, felt even better than Nintendo's. The difference is that this technology works without having to hold any peripherals, with the power of the 360 bringing high-resolution graphics and surround sound, and at a good price. You could use the hardware to pause your streaming Netflix movies, or browse the music on your 360's hard drive. The features of the ZCam brought to the 360 simply makes sense.

Or the original leak and rumor were just that, and we may be spinning our wheels. After contacting Microsoft we received the expected lack of comment. Still, the possibilities here are more than enough to get excited by.