There has been a fairly constant drum-beat about a PS3mote for a good two years. Ever since the first reports of the patent back in January 2007. As recent as last month we have seen reports from Kombo saying the PS3mote is complete and developers have been adding functionality into game recently.

According to a variety of sources, Sony is prepping for a proper showing of the new device at this years E3. Looks like Sony will have a ONE, TWO punch this year with this and the PSP Go annoucement.

A good source saw a working prototype several months ago that largely fit what was in the patent. Sony’s controller apparently used LEDs (light emitting diodes, essentially little electric light sources) and a small webcam to track the device’s movements. Because the camera can read different color lights and the shape and angle of each light, it’s much more accurate than the Wii-mote. It can track precise movements, including along the Z axis (pushing toward and away from the TV; something the Wii is really bad at) as well as velocity.

– Variety

[Source]