It was only a matter of time.

Microsoft finally acknowledges now that maybe Nintendo had a good idea with the concept of a motion-sensitive game controller. And of course, the Redmond, Wash.-based software and gaming giant paid homage in its own special way — by taking the concept a big step further.

At E3 yesterday, MS took the wraps off “Project Natal,” a new technology for controlling game action using the gamer’s entire body, instead of waving one’s hand or swinging an arm: With Natal, players move, dance, writhe in front of a special bar-shaped sensor connected to Xbox, and those motions are reproduced in whole on screen in the game.

Not only that, the sensor hears voice commands and can distinguish between people’s faces as well as their voices, so that Game Guy can jump around with maybe three or four other people in a room and the sensor will always recognize him as the one in the group who can’t dance.

The potential for this kind of technology is staggering, and not just because it puts people inside the games they play. One can see how something like this, by extension, could work for assorted other fields, such as medicine, where surgeons someday may literally “walk” inside a patient’s heart to repair it.

Project Natal no doubt is the biggest thing to come out of the annual E3 gaming show this year, and maybe even the past couple of years. Its existence opens a door to a whole new experience that could turn video games into reality shows, perhaps even redefine the boundaries between reality and virtual reality.

One thing, though, and this is what makes Game Guy think Project Natal could be dead on arrival when it’s released: Microsoft insists this new technology will work absolutely, perfectly fine with existing Xbox 360s.

That means no console upgrade would be necessary — no Xbox 720 or Xbox 1080, for that matter. Gamers could just plug Natal’s peripheral components into the current green-light-glowing devices and start flailing away; they’ll pay maybe $100 or so for the add-ons, Microsoft estimates, but nothing more.

This is great news, naturally. In this anemic economy, which probably will remain that way for a time, who would want to plunk down a huge wad of cash on a whole new gaming system anyway?

Game Guy wonders though if that might have to happen anyway for Natal to survive infancy.

As anyone who has read here regularly knows, Game Guy is down, way down, on Xbox 360, a powerful console that has been weak in the knees since its debut in late 2005. The 360 was the first system out the gate in the race against rivals Sony and Nintendo to grab the largest chunk of market share on a seventh generation of gaming consoles, including the PlayStation 3 and Wii, that would be more powerful and much more entertaining than previous systems.

Nintendo has capitalized on the Wii’s motion-sensing capabilities. However, Microsoft and Sony made it clear the Xbox 360 and PlayStation 3 were not just gaming systems but the centerpieces of a home entertainment system that would let people channel their gaming, movie-watching, TV and Internet needs through a single device.

Because Microsoft and Sony were gunning for essentially the same market, one company needed an edge, and Microsoft thought it seized that by releasing Xbox 360 almost a full year ahead of PlayStation 3.

Soon, however, gamers found a ghost lurking inside Microsoft’s machine. Design flaws caused Xboxes to “brick” or stop working, signified by three of the four green lights around the power button turning red, source of the now-ubiquitous phrase in gaming circles as “red ring of death.” Xboxes were prone to scratching game DVDs, too — an entirely different problem so pronounced it prompted lawsuits and a government-level consumer protection investigation.

Microsoft first denied Xboxes were dying faster than mosquitoes in a Raid commercial, then backed away from that position and instituted a series of replacement programs and extended warranties that have cost the company well over $1 billion. The replacement program itself fell under criticism when aggrieved Xbox 360 owners found their systems were replaced with reconditioned systems, not new ones, when the replacement systems died months later. Other problems involving firmware updates and video output have surfaced as well.

Microsoft says all of these issues have been addressed and the average Xbox lifespan of 18 months has increased dramatically, with the newer, more expensive, black-box Elite systems showing particular durability. But the “red ring of death” persists, and Elites, in fact, are not immune. Game Guy is on system No. 5; his fourth, an Elite, died with the tell-tale RROD glowing on its front earlier this year.

Xbox loyalists have hammered the console’s critics, insisting that when Xbox works it works very well. And they’re correct — Xbox 360 is a joy when its lights remain green. But when you can measure a console’s lifespan with an egg timer, the solution is not to simply buy a new egg timer.

Natal represents a great step forward for Microsoft. To ensure the company doesn’t trip and fall over itself again, it needs a better designed console to continue moving forward. Otherwise, the future of Natal will be fatal.