Not so long ago, a major rumour dropped courtesy of an MTV source that Microsoft was developing a Wiimote-style peripheral for the Xbox 360. Many were shocked at the totally crazy news, but truth be told, there have been rumblings about the possibility for some time. That report just added a big pile of legitimacy to the whispers.
Now 8bitjoystick, a blog known for close affiliation with somebody at Microsoft, is confirming that the peripheral indeed exists under the codename "Newton," and that the public could see the device by this winter.
Their details tell of a device using licensed Gyration patents—the same firm Nintendo scored much of their tech—that utilises an LED sensor bar, accelerometers and gyroscope, as well as separate 2-way wireless communication (just like the Wiimote uses Bluetooth, the 36mote would probably use Microsoft's proprietary frequency).
8bitjoystick speculates that the Xbox Play & Charge battery pack will fit in the controller, and will dictate much of its design (assuring curved edges and a dual-AA width).
My thought on the matter is why wouldn't Microsoft make such a device? So what if it flops? So what if Microsoft loses a few licensing dollars? A 360mote would allow Microsoft to compete with not just Sony, but Nintendo as well.
Xbox 360 "Newton" Motion Sensing Controller Confirmed [8bitjoystick]