It's something that's been floating around ever since Microsoft unveiled Project Natal last June, creeping up as scuttlebutt here and there, and this week at CES it has been confirmed. Initially the motion-tracking camera device was to include its own internal "custom processor running proprietary software," in an effort to divert some computing power from the 360's hardware for the likely-to-be-resource-heavy games, but that custom processor has been scrapped.
In place of the physical processing unit, Microsoft will instead use a new 50MB software solution for tracking Natal's magical "bone system," a move that will enable quicker, more efficient updates/patches, have little-to-no affect on the device's 100ms input lag, and enable Microsoft to keep the product's cost at retail down. It is rumored that Natal will hit store shelves between $40 and $80 this November.
Since a separate processor has been removed, Natal will draw on one of the Xbox 360's three processor cores, requiring approximately 10-15% of the console's hardware power. Microsoft had previously said that already-released 360 titles getting retrofitted Natal controls via patches was highly unlikely, and now that seems to be something that will be not likely occur at all; unless highly skilled developers get to work and figure out a way. Digital Foundry state, "Patching up older games to run with the new hardware now looks rather unlikely unless they have the CPU time to spare." How this may affect Natal's ability to work in "high end" experience also remains mysterious.
Microsoft's Alex Kipman said this week, "Natal has to work on the existing hardware without taking too much hardware processing away from the games developers ... When we train this 'brain' we are telling it: this is the head, this is the shoulder. And we're doing that over millions of frames." Natal's camera can read over 31 body different parts (trillions of configurations) per frame, at 30 frames-per-second, researchers have revealed. Additionally, it can recognize any pose you do in just 10 milliseconds. "[Natal] correctly positions your hand even if it's held behind your back… It knows the hand can only be in one place."
[Update]: Kotaku did a little digging here at CES, and got some additional answers, specifically dealing with the above subject of Natal and high-level games.
"... while Natal wouldn't use the horsepower of a full core of Microsoft's three-core central processor, it would need to use a core on its own in order to reduce latency between human input and what happens on a TV screen. That would leave the CPU's other two cores for the other processes needed to run Natal-compatible Xbox 360 games. ... High-end graphics such as those in a richly-rendered racing game such as Forza 3 could still be possible...but compromises might have to be made for "slightly reduced" artificial intelligence, sound or physics."
Microsoft, meanwhile, responded to the claims of Natal eating into the 360's hardware, saying they can't provide full details, but that "we can assure you that 'Project Natal' does not require a dedicated Xbox 360 CPU core."
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