It seems that Microsoft is currently in talks with 3DV Systems, an Israeli start-up company that produces technology that lets users control games through gestures to a camera (via Haaretz.com). Microsoft is putting $35 Million on the table to purchase the technology company possibly in hopes to bring camera-based gaming to the Xbox 360 or a future system.

With the Playstation EyeToy gaining steam through uses in games like LittleBigPlanet we can be sure that Microsoft wants to do something that actually utilizes the camera for the 360 for something other than TotemBall and taking gamerpictures only friends can see. Who knows what this means for their games, possibly a camera based avatar game? We will just have to wait and find out.

While we don’t have much more on the story yet, we will bring you updates as soon as they develop. (Thanks to Geoff Keighley via Twitter for the info.)