Nintendo boss Satoru Iwata was offered the chance to sign up the device that became Project Natal - but turned it down as he didn't believe he could launch it at a mass-market price.

That's according to a top insider (and we mean top insider) at the platform holder's Japan HQ, who told us that Israel firm 3DV Systems showed an early demo of the technology to Iwata and other Nintendo bigwigs at the end of 2007.

Despite being impressed with the prototype, Iwata was reportedly unsold on it as a peripheral for Wii - leaving the door open for Microsoft to snap up the tech and its creator a year later.

"Iwata-San only ever invests in something he can guarantee will work for a Nintendo audience," the exec told us.

"3DV showed off a camera that detected motion in 3D, and had voice recognition - but Iwata-San was unconvinced he could sell it at a Nintendo price point. He also had some worries around latency during gameplay."

The new information appears to confirm 3DV's involvement in the creation of Natal, which Microsoft has never certified.

Microsoft first showed off Natal at E3 2009. - with Peter Molyneux in particular stunning the audience with boy-sim Milo.

"Honestly - I've heard Iwata describe the prototype he saw at length, and it's definitely Natal," added CVG's source.

"What we witnessed at E3 was smaller and the facial [reading] stuff had improved, but it's the same technology. We remain unconvinced Natal will deliver on the more sophisticated elements of what Microsoft is promising at the price they're aiming for."

Microsoft will no doubt internally disagree with the claims. MS has dubbed Natal a'new console' in itself. The hardware is set to launch late this year, with an expected price point of around £50.

Iwata's alleged belief that the device would be too expensive fits with recent reports that Microsoft removed a chip from Natal to save on R&D costs, whilst some prominent development figures have also questioned whether Natal will have potential latency issues.
Nintendo's Shigeru Miyamoto has previously admitted: "This type of motion-sensing camera technology has been around for quite a while. [We've] ultimately made the decision not to take advantage of what they can do."

Unsurprisingly, both Nintendo UK and Microsoft would not offer us a comment on the "speculation". (Trust us, it ain't).

What do you reckon, readers - was Iwata right to say "no" to Natal? Or will he look back on the one that got away?

Why invest in new technology when you can crank out yet another Mario game.

QFT. Nintendo don't invest in anything unless it prints money.

It was obvious from the start that Nintendo have already looked at the tech. Natal is nothing but old stuff rehashed in a new package, much like wii remotes. However the Wii has proven that its nothing about how high tech you get, its how well you market it.

So here we are. Nintendo was offered Natal first, but Iwata turned it down.

Lets not forget that Sony and Nintendo were once in a tentative partnership to develop the new Nintendo console and then the agreement went sour due to creative difference/money issues.

I don't see why this is such a big announcement.

Wasn't that the 64/ps1?

Overseas maybe. But not here. I see absolutely no marketing for anything Wii. DSi occasionally.

Regardless of marketing I do not see why Microsoft and Sony are trying to buy into the same motion sensing market that Nintendo and the Wii has already proved to have dominated.

Its just going to be a lot of wasted money for the both of them, they are not bringing anything new to the table.

They do quite a bit of TV marketing for wii. I see it all the time. TV ads with various celebrities.

Its as such trying to swipe the crown off the Wii but rather more along the lines of filling up pot-holes in the consoles credentials. Parents are supposed to look at the consoles side by side and see that the competitors also have motion controls and so they may think twice about the Wii.

Natal, though -- the motion offering from Microsoft -- not so much. The same studio rep calls Natal a big, buggy mess. "It's sh*t," he adds, saying that it just doesn't work as promised. That it's slow and that the camera is imprecise, which he notes, is causing some major development woes.

He refers to a development conference Microsoft held not so long ago in which Peter Molyneux of Fable fame (presently, creative director at Microsoft Game Studios) took the stage and attempted to demo the publisher's much-publicized Milo Natal project. Molyneux apparently called someone from the audience to the stage and asked them to interact with the virtual boy, but it didn't go to plan. Natal's camera failed to see the person accurately because he was wearing a black trench coat. After some fiddling, he was asked to remove his trench coat and -- whoops -- wore a black shirt underneath. When it still didn't work, he was invited to take his seat again.

Next, Molyneux said that Milo could interact with illustrations drawn to paper and scanned by the camera. He asked the audience for suggestions. "You could see him **** his head and listening for the right key words, and then finally he heard something the game would recognize," my development source explains. It was a cat. So he invited someone from the audience to ascend the steps to the stage and illustrate the feline on paper. When Natal attempted to scan the horribly scribbled drawing, it instead picked up the Abercrombie & Fitch logo on the person's sweater.

I laugh at this but try to play devil's advocate. Okay, I say, so it's obvious you're not a fan, but somebody must be getting this thing to work well or it wouldn't be on the slate to ship this year. I ask if he knows of any other studios struggling with Natal.

"How about Rare and Lionhead? They're just going to try to make launch and then they're going to patch everything later," he says, laughing.

I'm very interested in the platform, but I haven't entrenched myself in Natal development. Later, when I bump into a colleague, I ask them if they have heard any behind-the-scenes rumblings about development trouble with Microsoft's casual entry device. He turns to me and says that yes, he has -- that studios are telling him they're struggling to get it working.

When Natal attempted to scan the horribly scribbled drawing, it instead picked up the Abercrombie & Fitch logo on the person's sweater.

saying that it just doesn't work as promised.

Maybe the AI was just like "that picture is crap" and decided to scan the logo on the shirt instead.

I'm curious to see if the original version with the inbuilt chip was better.

does like no one remember the eye toy..