Report: Microsoft in talks to buy Israeli VR firm
The ZCam, from 3DV Systems, which is rumored to be in acquisition talks with Microsoft.
(Credit: Jared Kohler/CNET Networks)Microsoft hopes the acquisition of a virtual reality start-up will give it another trick up its sleeve in the game console wars, if one report proves true.
As anyone who has been following the video game industry over the last couple of years knows, Nintendo's Wii console has been the runaway sales leader.
In the early going of the so-called "next generation" of consoles, which began in late 2005 with the release of Microsoft's Xbox 360 and continued a year later with the launch of the Wii and Sony's PlayStation 3, each company tended to refer to the "console wars" as being a battle between the three.
But more recently, as the Wii has vaulted far ahead of either the Xbox or the PS3, Microsoft and Sony have recast the console wars as being just between the two of them; They argue, instead, that the Wii is a very different kind of machine and that, in fact, many Xbox or PS3 owners also own a Wii.
Semantics aside, it's clear that Microsoft and Sony have long since determined that their consoles might never catch up to the Wii in total sales, especially if they don't do something drastic to compete with the Wii's intuitive motion-sensitive controller, the Wiimote.
That might explain why Microsoft is in negotiations to spend around $35 million to buy Israeli start-up 3DV Systems, as is being reported by the Israeli daily Haaretz.
With its ZCam, a 3D camera that connects directly to a PC, 3DV was already hoping to be a player in the video game space, since the camera was designed to let players control games entirely with their hands.
The ZCam was designed to put out short infrared pulses and then measure the reflections off objects. Then, the system's algorithms interpret the reflections, allowing it to judge the distance of, and distinguish between, different objects.
In late 2007, 3DV vice president of marketing and product management Tomer Barel told CNET News that the ZCam is built to focus on a gamer's hands, even distinguishing between his or her fingers, and that it can run a variety of applications depending on what the person is doing with their head, torso, hands, or fingers.
At the time, Barel said 3DV was looking to license its technology, perhaps even to one of the main console makers.
Now, however, Microsoft finds itself looking for ways to bolster sales of the Xbox, despite strong sales over the last couple of years. As such, the ZCam, if recast as an Xbox 360 accessory, could provide a boost to the Xbox and help the console appeal to the same kind of broad audiences that the Wii does, in large part because of the flexibility of the Wiimote.
Microsoft declined to comment for this story.
But Haaretz said definitively 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."
If this were the case, then, it would likely be a big move for Microsoft. While the ZCam was still quite a way from prime-time readiness in 2007, it is surely much further along now, and if Microsoft were to acquire 3DV, the company would seem to have a high degree of motivation to expedite integrating the technology with its own gaming system.
Given that consumers have demonstrated their attraction to the Wii and its Wiimote, it would seem to be a very smart decision for Microsoft to find some kind of technology for the Xbox that could provide a similar attraction. And though the economy is in shambles right now, $35 million is pretty small potatoes for a company like Microsoft, especially for a technology that could help it sell hundreds of thousands or even millions of consoles over the next few years.
Daniel Terdiman is a staff writer at CNET News covering games, Net culture, and everything in between. E-mail Daniel. 





I want you to hold up your empty hands, aim an imaginary gun and fire it. Did you hit anything? How can you be sure? How could you aim the gun?
Now try fishing, cast the line and draw it in. Did you catch a fish? How can you be sure you hit the right spot?
Driving next. Try steering the car to the left. Did just your hands move or did you whole body move? If your whole body moved and the wheel is tiny, did your hands stay on the wheel?
The ZCam has potential. It has incredible potential for allowing real-time holographic interfaces. It has potential for allowing a new way to maneuver a computer screen (something Apple has patented with touchless tech fairly recently for the iPhone/iPod product line). Imagine scrolling up a page just by flicking your finger up and never having to touch the screen.
The ZCam has potential. Video gaming isn't the right area for it.
It would be pointless to attempt to control any game with any controller on any console no matter who makes it without the ability to accurately point.There's no doubt that this capability is included or can be included. If not it's going to be used for another purpose other than the one stated in the article.
Imagine having the game in front of you playing. Now hold up your hand with your finger pointed at the screen like you are holding an imaginary gun. Make note of where the on screen curser (target) shows you are pointing. Now move your imaginary gun and watch the curser move around the screen, it also moves the cursor, or pointer doesn't it? You see, you know exactly were you are pointing because you can see the cursor target moving.
I don't think you were very good at this game when you where a kid where you?
http://www.ynetnews.com/articles/0,7340,L-3673174,00.html
I thought it wasn't for sale yet. But I could be wrong.
Such a shame that Microsoft is buying the company, makes it a mass product again only for their systems. They want to buy everything just to keep competition away.
- by knowles2 February 18, 2009 6:59 AM PST
- To me it would not make sense for Microsoft to bring this out in this war, they have lost to the Wii.
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- by celticbrewer February 18, 2009 7:11 AM PST
- I totally agree. This concept has been around for years but hasn't caught on- most likely because it hasn't been implemented well. How easy is it to program for this interface? How reliable and precise is it? Even the wii has had to add the "motionplus" to improve the experience.
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(9 Comments)Simply put if they introduce it this generation they will discover why the eye 2 has not took off and that because game developers will not use technology which is essential to playing a game unless it is available to every player. It would make sense the either Sony to Microsoft to acquired the company and integrate the technology into the next generation of their console and to sell one as a standard interface for that controllers as alternatives for other games. This is the only way a game studio will actually put in the effort and money require to make use of the technology in the actual games. I would also consider removing the normal controllers forcing them to use the new interface and as well as forcing the gamers to use new interface. This however may prove to be to greater risk.