Rumors this week suggest that software giant Microsoft has acquired an Israeli virtual reality company. Although the acquisition could present any number of uses, insiders are speculating that the move has been made to improve the Redmond-based company's second-place position in the video game industry.

While much of the technology world buzzes about its upcoming Windows 7, Microsoft has made an important move in its attempt to halt Nintendo's steady advance in the gaming industry. As the Wii continues to run away with the gaming crown by employing motion-sensitive technology and accessible titles, Microsoft has turned to an exciting alternative field: virtual reality.

According to rumors, Microsoft spent as much as $35 million to acquire the Israeli start-up company 3DV Systems. For some time that firm has been working on a rather unique system that employs a three-dimensional camera connecting to a PC. It's not drastically different than older technology that allowed players to interact with each other and a game by watching their movements through the camera and on screen. (Source: reuters.com)

More Advanced Virtual Reality

However, 3DV's technology is more advanced. It sends out infrared pulses in order to measure the reflections off objects and judge movement. 3DV had been concentrating most of its energy on hand and even finger movements, although it appears that same technology can be used to interpret head, torso, and arm movement.

Although Microsoft declined to comment on the rumor or its interest in virtual reality systems, Israeli news publication Haaretz has been all over the story. In a statement, it revealed that "Microsoft is negotiating to acquire... 3DV Systems for about $35 million, despite the alarming condition of the global economy and grim forecasts of more pain to come... Microsoft apparently plans to use 3DV Systems' technology in its own gaming technology, probably in the Xbox 360." (Source: cnet.com)

If it indeed has acquired such technology, Microsoft may be ready to bridge the divide between its established hardcore Xbox 360 fan base and the seemingly endless mainstream consumer base slowly being enveloped by Nintendo.