Microsoft's second generation Kinect motion sensing device is said to be so accurate it can read lips. The accessory will also be able to interpret voice pitch and facial characteristics to determine what mood the player is in, sources have told EuroGamer.

To achieve such feats, the device will feature improved motion sensing and voice recognition capabilities. Kinect 2 will also connect to the Xbox in a different way that current generation hardware.

The original Kinect, innovative as it is, features a depth sensor set at 30 frames per second and a resolution of only 320 x 240. These limits were set in place because the USB interface it uses to connect to the Xbox also has to share bandwidth with other USB devices. As such, Kinect only uses around 15MB of bandwidth instead of the 35MB or so that the interface is capable of.

"It can be cabled straight through on any number of technologies that just take phenomenally high res data straight to the main processor and straight to the main RAM and ask, what do you want to do with it," one source told EuroGamer.

If true, Kinect 2 would likely have its own connection on the front or back of the new Xbox machine, bypassing any potential USB ports along the way.

We reported earlier this month that Microsoft could be preparing two new gaming consoles to replace the Xbox 360. A budget-friendly offering would be positioned as a set-top box and would be ideal for casual gaming and media streaming. A second system, rumored to feature a six-core CPU and AMD graphics, would be targeted to hardcore gamers.