This is my first blog post so (if anyone reads it), please go easy on me:
With all the activity around the Playstation Move at the moment, I've been thinking about Project Natal. I was very excited when I first watched the Natal demonstrations as it seemed that the future (according to Steven Spielberg) was just around the corner. I think, in a lot of ways, it will be awesome - however, it will also be very very bad.
As technology improves and movies and video games are able to more closely approximate realism, humanoid characters get dangerously close to the Uncanny Valley. But apart from characters, this can apply to every aspect of games too. In Grand Theft Auto 4 I was amazed by the amount I could do, so when I tried to walk into a coffee shop and realised it was just a painted wall, my emersion was yanked.
I can only think that this will get much worse, the closer to realism we get. Project Milo is a good example; the program is designed to engage you in the characters world. He can read your emotions, understand language and react. So, imagine getting into a conversation with Milo and really getting involved in that world. If you play for more than a few minutes you are destined for disappointment. Due to constraints of designers covering all necessary voice recordings, you're guaranteed to quickly run into dead ends where your actions or ideas simply weren't anticipated and so cannot be responded to. When playing Super Mario Brothers finding out the princess doesn't really love you is fine, in GTA4 finding out a coffee shop is just a painted wall is annoying; in the Natal future, being so close to reality but constantly reminded of the simulations limits will be deal breaking.
If the PS3 and 360 already can't avoid this situation with low fidelity, less interactive games that only need to respond to controller inputs, imagine how they will cope with this future.