One of the major limitations of Microsoft's current Kinect hardware is the inability to detect a hand with sufficient resolution to make out individual fingers. Microsoft has apparently been working on a potential solution to that problem which involves, of all things, strapping a camera directly to a player's wrist.
At this week's ACM Symposium on User Interface Software and Technology, engineers at Microsoft Research published the first details on their Digits project, which uses a wrist-mounted IR camera and laser system to detect the precise bend of each finger down to the knuckle. An inertial measurement unit on the device adds sensing for the orientation and movement of the arm and wrist, letting the units make a passable guess at the hands' position in three-dimensional space as well.
The first thing we'd want to do with such a setup is to make a hand into the shape of a gun and fire in a virtual environment, and sure enough, the above sample video from the Digits team shows just that. For movement, the video suggests that Digits users could make a fist to "grab" the environment and pull themselves through, a setup that looks a little more cumbersome than just pushing a joystick forward. Outside of gaming, the researchers suggest Digits could be handy for manipulating objects on a tablet without touching the screen or using gestures to control a phone while it's still inside a pocket.