Thanks to Microsoft CEO Steve Ballmer's address at the Consumer Electronics Show (CES) Wednesday night and a video interview with Entertainment & Devices President Robbie Bach, we now know more than ever about Microsoft's upcoming motion sensitive gameplay device, Microsoft Natal.

Microsoft had hoped that details about the new game system, which rips off the Nintendo Wii's motion sensitive gameplay, would emerge during a Las Vegas presentation Wednesday night by its CEO Steve Ballmer. However, the company slipped up and posted a video of former Xbox chief and current Entertainment & Devices President Robbie Bach playing Natal and discussing some of its features.

As it turns out, the company confirmed several of these leaked details during its presentation at the Consumer Electronics Show Wednesday night and Thursday.

Natal Due Holiday Season 2010

First off, the big news: Natal will hit the Xbox 360 this holiday season.

Pictures of the device have emerged, and it looks like a slim, black, horizontal version of the Xbox 360 Elite itself. Not much else about Natal was revealed, but Ballmer sure was excited about it in declaring that 2010 will be the Xbox 360's biggest year yet.

Game Room: 1000s of Classic Arcade Games

Surprisingly, Microsoft had much more to say about Game Room, an idea leaked early Wednesday by the accidentally-released Bach video.

Game Room will essentially be a whole new feature for the Xbox 360's Xbox Live online service (and will also be available for Windows PCs). It's a retro gaming service that allows fans of classic games (including Millipede, Combat, Outlaw, Red Baron and more) to collect these titles and show them off to friends in a virtual arcade room.

In a press release, Microsoft promised plans to release "over 1000 games... throughout the next three years." That suggests they have plenty of faith in Game Room, Xbox Live, and the Xbox 360. (Source: pcworld.com)

Classics for Under $5 with Spring Debut

Game Room titles will be pretty affordable too; buying one for the Xbox 360 alone shouldn't cost more than about 240 Microsoft Xbox points, or an estimated $3. It's possible to download these games for play on both an Xbox 360 and a Windows PC for an extra $2. (Source: gamespot.com)

Robbie Bach predicted that the service will make its debut before the summer. There's no word yet on how much different it will be from Microsoft's current classics platform, Xbox Live Arcade.

All of this is fascinating new strategy for Microsoft, who at this point don't seem to be bothering with plans for a Blu-ray add-on, perhaps one of the more attractive features of rising competitor Sony and its PlayStation 3. Instead, the company appears intent to go after the big dollars by competing directly with Nintendo's Wii, a runaway hit with casual gamers.