Microsoft have confirmed what had already been on the Twittermill for months, and good 'ol Wossy leaked a while back too.
That is, Project Natal, MS answer to the Wii, and in my opinion a much better one than the Playstation Move (Athough in action it does look fantastic, check out Engadget's exclusive hands-on)
See below for the phone call with MS' Marketing Manager for Saudi.