According to Eurogamer, sources have claimed that Microsoft is working on a new version of Kinect so accurate that it will be able to lip read, read various emotions and detect which direction the player is facing.
The original Kinect was limited in the amount of information it could send to the Xbox 360 through USB, which is part of the reason why the resolution and the frame rate was lowered. By having the new Kinect directly built into the machine itself, the potential for the device in increased multifold.
Some rumours are stating that a next generation Xbox 360 will be launched next year, others give the more realistic date of 2013. Regardless, we expect that we'll most likely see something at E3 2012 this year.
But lip reading? That's pie in the sky talk! That said, as the bearer of a broad Scottish accent, it may be the only way Kinect will be able to understand a single word I say!
Kinect 2 so accurate it can lip read [Eurogamer]