In fact, Caris & Co. analyst Sandeep Aggarwal says he expects Kinect to generate about $2 billion in gross revenue for the Xbox ecosystem. Beyond sales of Kinect itself, the controller is also driving sales of most everything else Xbox related. In Aggarwal’s view, Kinect offers four distinct benefits to Microsoft:

1. Better material attach rate for the 45 million Xbox installed base
2. Higher adoption and market share gain for the console itself
3. An uptick from the sale of new titles
4. Lower attrition and higher gross new subscriber growth for Xbox Live users

“As expected, the launch of Kinect increased noticeably the overall buzz around Xbox and helped improve the adoption of the console,” he concludes. “Just before the launch, Microsoft increased its forecast for worldwide sales from 3 million to 5 million by the end of the year. This forecast seems conservative now, given the strong reception.”

But there’s one more company at the end of that oblique line of ownership: Intellectual Ventures, an “invention capital firm” or patent troll, depending on your views on innovation and intellectual property.

Over the past few days, multiple sources with knowledge of the patent have told me it is owned by Intellectual Ventures. And now Intellectual Ventures has confirmed this. The company operates Memscom LLC, which operates Durham Logistics LLC, and through Durham, owns patent #7,679,604.

According to intellectual property consulting firm Avancept, Intellectual Ventures is linked to some 1,110 shell companies and affiliated entities. Evidently, Memscom and Durham Logistics are two of them.

Patent #7,679,604 is just one of many that Intellectual Ventures owns through that pair of LLCs. The U.S. Patent and Trade Office lists 29 patents and patent applications assigned to Durham Logistics (see list below; click to enlarge), all of which were first developed by ArrayComm, the wireless communications software company founded by cellphone pioneer Marty Cooper.

Among them, #6,834,249, a motion-control patent nearly identical to #7,679,604, that was granted in 2004 after a 2001 application and would seem to predate many of the motion-sensing smartphones currently on the market.

What does Intellectual Ventures intend to do with these patents? Well, that’s obvious, isn’t it? Said an Intellectual Ventures spokesperson: “We don’t currently have specific plans to announce regarding any asset(s) in particular, but we are actively talking with customers about licensing our invention portfolio on fair and reasonable terms.”

COMPLETE COVERAGE:

• New Motion Control Patent Could Shake Up Smartphone Industry
• Smartphone Motion Patent’s Authors Are Google, Apple Engineers
• Confirmed: Intellectual Ventures Owns Smartphone Motion-Control Patent

This week, I’ve done the dirty work for you: I’ve amassed a collection of vital details about the three most popular systems—Microsoft’s (MSFT) Xbox 360, Sony’s (SNE) PlayStation 3 and Nintendo’s Wii—so that you can get a handle on what each offers and what it will cost you.

Nintendo Wii

Nintendo recently dropped the Wii’s price, for the first time, to $200 from $250. The Wii Console comes with a controller, an additional controller called a Nunchuk, and the Wii Sports game, which includes baseball, tennis, golf, bowling and boxing. It holds 512 megabytes of flash memory, but you can increase this by inserting SecureDigital memory cards. It also accepts high-capacity SD cards, or SDHCs, of up to 32 gigabytes.

The couch-potato world of videogamers was shaken up when the Wii, with its motion-sensitive remote control, was introduced about three years ago. Users can play Wii Golf, for instance, by swinging the remote like a golf club. In September, Nintendo added to its lineup a $20 remote-control accessory called Wii MotionPlus that was designed to add more precision to game motions. I tested this snap-on piece and found that it did make the Wii’s motions feel more realistic. But it works only with Wii MotionPlus games—and there are only six of them; 10 more are planned for 2010.

Wii encourages users to move around in more ways than just waving a remote: Its Wii Balance Board, which comes with the Wii Fit Plus game in a $100 bundle, works like a digital exercise step. It records the body’s weight shifts and movements for activities from yoga to wake-boarding.

The Wii accesses the Internet and lets users compete online against others. About 655 packaged games are available for between $30 and $50. Also, you can use pre-purchased Nintendo Points to buy and download about 150 WiiWare games and over 325 titles from the older Virtual Console library. Each game costs between 300 and 1,500 points, or between about $3 and $15.

WiiConnect24 can send messages from one Wii to another over the Internet, as long the two users exchange “Wii numbers.” Users can also surf the Web with Wii’s Opera browser. But beyond this, no other Web features—like downloadable movies, social-networking applications or streaming music—will work on this system.

Parental controls can be set on the Wii to restrict kids from using the Web browser, playing games that have a certain rating or communicating online.

Microsoft Xbox 360

Microsoft recently stepped up its game by adding features to its $200 Xbox 360 that make it well-rounded rather than strictly geared toward serious gamers. People who buy the Xbox LIVE Gold membership, for $50 a year, get applications for Facebook, Twitter, the Last.fm music-streaming service, online multiplayer game play, video chat, Netflix (Netflix subscription required), photo sharing via the Xbox, and movie or photo “parties” that allow users to watch a movie simultaneously with seven other friends.

Xbox LIVE Silver membership is free and includes basic features like voice and text chat, as well as access to the Zune video library’s 20,000 TV shows and movies to buy or rent. The Xbox also allows media-streaming over a home network. To wirelessly connect to the Internet on your Xbox, you’ll need to buy a $100 Wi-Fi adapter. By contrast, the Wii and PlayStation 3 have built-in Wi-Fi.

Anyone who owns a Microsoft Zune media player can buy a TV show or movie and download it to an Xbox or PC as well as the Zune. Zunes can be plugged into the Xbox to play music, as can Apple (AAPL) iPods.

The base Xbox comes with a wireless controller and 512 megabytes of memory. For $100 more, the Elite Holiday Bundle includes a 120-gigabyte hard drive, headset, wireless controller, and two games: “LEGO Batman: The Videogame” and “Pure.” More than 1,200 games are available for the Xbox, mostly costing between $29 and $60. About 350 of the games can be downloaded from the Xbox LIVE Arcade (costing 400 to 1,600 points, or $5 to $20) or the Games on Demand library.

Microsoft confirmed plans to introduce Project Natal, a system that lets people operate games with gestures and body movements rather than remote controls. Natal will work with all Xbox 360 consoles. Microsoft won’t confirm a date.

Family settings let parents control whether their kids play games online and with whom they play, as well as the ratings of the games. A Family Timer regulates how long kids play.

Sony PlayStation 3

Sony’s PlayStation, like the Xbox 360, is designed with serious gamers in mind. Its base version costs $300 and includes a 120-gigabyte hard drive and a DualShock 3 wireless controller; $50 more buys a version with a 250-gigabyte hard drive. Both systems can be upgraded with any standard 2.5-inch hard drive. The PlayStation is also a Blu-ray disc player.

Like the Xbox, the PlayStation 3, or PS3, now offers extra features, but these features are all included in the PlayStation Network, which is free (not $50 yearly like Xbox LIVE Gold). These PlayStation Network extras include Netflix (NFLX) instant streaming, a Web browser, photo slide shows, the ability to stream media over a home network to the PS3, a Facebook application that shares game information with friends and the PlayStation Network video-delivery service, where users can purchase 2,400 high- and standard-definition movies and 15,000 TV episodes.

The PS3 and the PlayStation Portable, Sony’s portable gaming device, are married in many ways. A new feature called Blu-ray Portable Copy lets users make a free standard-definition copy of some Blu-ray movies for transfer to a PlayStation Portable. Remote Play lets people stream media files from the PS3 to the PlayStation Portable in Wi-Fi hot spots or remotely turn the PS3 on or off using the PlayStation Portable. Movies and TV shows from the PlayStation Network can be transferred to either system, so you can start a movie on a big-screen TV and finish it on the PlayStation Portable; the same can be done for games.

About 400 games are available on Blu-ray for the PS3; these cost between $30 and $60. More than 150 titles, costing between $3 and $40, can be downloaded directly to the PS3. Sony confirmed that it will release a motion-sensing controller, but it hasn’t set a date.

Parental restrictions for the PS3 include the ability to restrict games, DVDs and Blu-ray discs with certain ratings. Parents can also limit monthly spending or Web browsing.

Games: A Cheat Sheet

Here are some of the key differences among three popular videogame systems.

Email: mossbergsolution@wsj.com

Write to Katherine Boehret at mossbergsolution@wsj.com

Corrections & Amplifications

Xbox LIVE Gold costs $50 a year. A previous version of this story incorrectly stated in the second reference to the price that it costs $50 monthly. Also, the Xbox 360 can be connected to the Internet via an ethernet cable for free, as well as via Wi-Fi. A previous version of this story incorrectly stated that connecting your Xbox to the Internet would require the purchase of a Wi-Fi adapter.

While Microsoft COO Kevin Turner did a kind of modified cheerleading act at Microsoft’s annual Financial Analyst Meeting, Entertainment and Devices President Robbie Bach played the teenage boy and Chief Research and Strategy Officer Craig Mundie the voice from the future.

During his presentation at the event at the Microsoft (MSFT) HQ in Redmond, Wash.–a series of presentations for Wall Street analysts and the media–Bach showed off the Xbox’s new Project Natal motion-sensing technology, which lets you play games and more without a controller.

Bach spazzed out nicely playing a game called Ricochet, with a storm of virtual red balls coming at him, although I was slightly worried the exertion might cause him to collapse on stage.

Turner was on before Bach, pretty much doing cleanup after CEO Steve Ballmer’s presentation, talking up all of Microsoft’s various businesses, while talking down its competitors’.

Said Turner, whose mantra was building market share for Microsoft: “Strong innovation, strong innovation investment, as well as strong operational excellence that we’re driving to compete and grow our market share.”

Strong, got it? (Frankly, I know companies always put their best foot forward at events like this–but after Ballmer’s own He-Man speech, BoomTown is a little worried that Scary Microsoft could be making a comeback, after a few post-antitrust years of Kinder-Gentler Microsoft.)

Bach, given his job, was a lot more entertaining and had more to show off, although he could not be as positive about the software giant’s mobile experience, given the juggernaut of the iPhone from Apple (AAPL).

“First of all, in Windows Mobile, as Steve pointed out, we had a challenging year from a share perspective,” said Bach. “Much tougher competition in the U.S. and certainly there is plenty of competition in this space.”

No kidding!

Natal is, of course, the pretty one for Bach’s division.

“It is about technology innovation and experience innovation. I think it will lead to a bigger and better business as well,” said Bach. “It is certainly an opportunity for us to build something new.”

Mundie also showed a lot of new futuristic stuff, which borrowed from the Natal technology, including a demo of a gesture-rich “office of the future” experience.

Said Mundie: “But as far as Microsoft, one of the greatest opportunities going forward is to realize there will be a successor to the desktop. It is the room. It is the fixed computing environment. The question is what can you do with computing when you have a much more robust man-machine interaction model and you don’t have to fold it in half and move it and run it on a battery.”

In the midst of it, though, he chit-chatted with a very scary “digital assistant” named DAG (I think it must stand for Digital Assistant Golem) on the screen, whose voice freaked me out in the exact way HAL from “2001: A Space Odyssey” always does.

After helping Mundie with a bunch of stuff, I am guessing DAG went off into the computer to work on a secret plan to kill off the human race.

Well, it was nice being here for this long on our little blue planet, Earth!

So, while we wait for DAG to destroy us, here’s the video demoing Natal that Bach showed to the audience, which is not new, but still pretty cool:

Philippe Kahn’s history of entrepreneurship is nearly as old as the PC itself. He developed software for the Micral N, one of the earliest commercial personal computers, back in 1973. As CEO of Borland Software (BORL), he touted himself the “barbarian” of the software industry and embraced that identity by holding one of the first press conferences for his company in a McDonald’s (MCD) in Las Vegas during Comdex. Ousted from Borland in 1995, Kahn went on to found wireless synchronization outfit Starfish Software, which he sold to Motorola (MOT). He followed that up with LightSurf Technologies, a picture-messaging company acquired by Verisign (VRSN) in 2005. Today Philippe Kahn is at D7 as CEO of Fullpower, a company developing accelerometer-based hardware and software.

Session Highlights

Live Blog

• Walt and Kara welcome Kahn to the stage.
• Fullpower, says Kahn, has developed the MotionX Recognition Engine, a technology intended to do for motion and gesture what speech recognition did for speech. “We’ve created a system that studies how you move, as opposed to reacting to it.”
• The first demo involves a headset with onboard motion sensing, the MotionX-Headset. “Basically what we’ve done is build a motion-sensing headset,” says Kahn. The headset will differentiate between the sources of motion of its user–if the user is walking or running for example.
• Kahn calls a colleague wearing the headset onstage. The colleague demonstrates how calls can be answered by tapping the headset, without using any buttons. Then the colleague begins walking and running around the stage — the technology is able to differentiate between actual user taps and all the other motion.
• The device also notices whether its user is walking or running, using the MotionX Recognition Engine and accelerometer to obtain an accurate measurement of distance and speed traveled. The headset tracks the user’s speed and distance, and the user can tap it for spoken updates about his or her progress. The headset automatically turns off when set down, thus saving power, and turns back on when the user picks it up again. Kahn: The same technology used in the headset can be embedded in phones and other devices.
• Moving on to the next demo, MotionX-Imaging, the technology demonstrated was full image stabilization using the MotionX Recognition engine and an accelerometer. These were built in to the smartphone. In order to demonstrate this for presentations, every time a picture is taken, the MotionX image stabilization is either applied (“stabilized”) or not applied (“unstabilized”) at random. The pictures are then sorted so you can compare all the regular pictures with the stabilized ones and see the benefit of the technology.

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The Kodak Theatre HD Player’s motion-sensing pointer remote works much like a mouse on a TV screen.

This week I tested the Kodak Theatre HD Player, the photo-centric company’s attempt to snag valuable real estate in the living room. This small, black box pulls photos and videos from computers around the house and displays them on an HDTV. It also enables the sending and receiving of photos via Kodak Gallery, and connects to Web-based photos stored on Flickr, Facebook, Picasa, .Mac and others. Podcasts, Internet Radio and updates from news feeds, weather forecasts and stock quotes are also accessible using the HD Player. And it has a terrifically simple motion-sensing remote that works like using a mouse on a TV screen.

But the HD Player isn’t all smiles. Its $299 price doesn’t include any built-in storage for keeping content directly on the device. It currently has no way of accessing HD movies or television shows, nor will it work with Macs. In comparison, Apple’s (AAPL) $229 Apple TV has 40 gigabytes of storage, can access HD television shows and movies via the iTunes Store, and works with Macs and Windows PCs. This is important because as budgets tighten in the current economy, gadgets have to prove their value and versatility more than ever.

After using the Kodak Theatre HD Player with Windows XP and Vista machines over the past week, I can conclude that this device’s interface shines in its simplicity and is a lot of fun to use. Kodak teamed with Hillcrest Labs to make the player’s motion-sensitive remote and corresponding software, which includes satisfying extra features like images that automatically magnify when the remote control’s cursor points at them and icons that make chirping sounds when selected. The remote itself is shaped to rest comfortably in a hand and has three simple buttons and a scroll wheel.

Quick-access memory-card slots for six types of memory cards appear on the box’s front, and two USB ports can connect to digital cameras or USB storage devices.

Currently, the player’s software works directly with Flickr, RadioTime (8,750 radio stations) and FrameChannel, which grants access to various “channels” like Facebook, .Mac, Picasa, People.com news and National Geographic. Kodak says it will incorporate YouTube access in January; I got a sneak peek at the interface for this and it looks well-organized.

Yet the HD Player’s smart combination of software and remote left me wishing it did a bit more. Photo sharing is enabled only via Kodak Gallery, so you can’t use another Web-based account to share photos directly from your TV. Likewise, a blue light on the box slowly blinks only when new Picture Mail (a message containing shared photos) is received on a Kodak Gallery account, not when new photos are added on other sources such as Flickr Photostreams or Facebook pages.

The Home screen of the HD Player shows four categories: Pictures & Videos, Kodak Gallery, Music and Entertainment. Subcategories are where you might guess they would be, for example podcasts are listed under Entertainment. And a tiny Home icon appears in the top right corner of every screen so you can always get Home with one click. The Pictures & Videos category holds photos and videos from a currently selected Windows PC.

An unlimited number of Windows PCs can wirelessly pair with the player as long as they have special Kodak software installed on them. But only one PC’s content can be accessed at a time. I toggled between two paired computers without a problem, but would’ve preferred accessing music and photos from both sources simultaneously.

The HD Player’s motion-sensing pointer remote works much like a Wii remote control. Wherever you move it, a tiny leaf-shaped cursor appears on-screen. A Hide button on the remote will hide the cursor while you watch slideshows. The remote’s Back button is helpful; when pressed, it backs you out of one screen using visual effects that make the screen shrink into the TV as if you were moving backward.

A play button appears on the first photo in a folder so users can select this icon to quickly start slideshows. Whenever the HD Player receives new Kodak Gallery Picture Mail, or a slideshow is created on a connected PC, yellow alert circles appear on the screen to notify users and a number in the middle of these yellow circles indicates how many new items are available for viewing.

Some content on my PCs took a little while to be recognized by the HD Player, including podcasts that I subscribe to on iTunes. When they did show up, both audio and video podcasts played without issue and on-screen playback buttons made them easy to control.

The HD Player uses your photos to create automatically generated slideshows, called Picture Chronicles, once a week. These Picture Chronicles use up to 50 photos from the same time of year in all of your folders, for instance grouping all Thanksgiving photos together from the past five years.

Kodak has plans to make its player Mac-compatible in the future and also hopes to add other partnerships with new types of content following its YouTube announcement early next year.

The Kodak Theatre HD Player does its job well, bringing photos and videos that might otherwise live only on your PC to your big screen HDTV. For the holidays, this device could be a real plus. But Kodak has some work to do to make this a more useful Web-connected tool.

Edited by Walter S. Mossberg

• Email us at mossbergsolution@wsj.com. Find this and other columns and videos online free at the All Things Digital Web site: http://walt.allthingsd.com

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