3DV Systems reportedly showed off an early demo of their Project Natal motion sensing technology to Nintendo Boss Satoru Iwata at the end of 2007. According to the rumor Iwata was impressed by the technology, but he didn't want to sign up the device because he didn't believe he could launch it at a mass-market price.
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."