It’s not clear what level of approval this leaked video has from Microsoft, but my guess would be that there is plenty of testing like this going to to determine the feasibility of FPS games on Natal.
If anything, it looks more awkward than playing with dual analog sticks, but given the right game design, it could work well. Something where precise movement is less important than intuitive interaction (the Penumbra series comes to mind) might just make this fly.
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