Lionhead Details Xbox 360's Virtual Child Milo

Showcasing the capabilities of the new Xbox 360 Project Natal camera controller, which includes voice and motion-recognition functionality, Fable 2 developer Lionhead Studios showed a video demonstrating a virtual child called Milo.

Able to recognize facial expressions and vocal emotions, Milo chatted with real-life demonstrator Claire. Milo also threw her a pair of goggles (which she automatically grabbed for and then "put on"). Later, Milo grabbed a piece of paper that Claire held in front of the camera for a mere instant.

Another aspect saw Claire splashing around virtual water in real-time.

Studio founder Peter Molyneux boasted that these were concepts even science fiction writers haven't been able to dream up, and that the technology is here, now.

That software will be shown behind closed doors this week.