Slatterz writes "Microsoft's Natal can recognize a player's skeletal structure, and also perform some sophisticated translation of body physics into in-game movement. As a control mechanism this is fascinating, but the next step is to merge the game graphics with the real world. Now, basic examples of augmented reality (AR) are being shown using a mobile phone, unlike previous demos which have involved walking around with a large backpack strapped to your body. A game titled Arhrrrr blends live-action video overlaid with game graphics. The processing is taken care of by Nvidia's new Tegra platform, while the game's 'maps' are generated by pointing the phone's camera (in this case 5MP) at a 2D drawing/printout lying on a table. The end result is a 3D world which seems to spring forth in real time, with buildings popping up as players move around the game 'map.' This story shows two other interesting videos demonstrating AR, including the ability to add real-life objects into the virtual game world and have the gameplay respond and react accordingly."