The controller itself isn’t much different in functionality or design from Nintendo’s Wii remote, but comes with four face buttons, an analog stick and microphone. There are also plans for the controller to interact with the Xbox Live Vision Camera, the source said.

Microsoft’s controller isn’t just a response to “Wii Sports”; it’s slightly more ambitious. “They want the usual assortment of ‘Halo’/ ‘Gears’/ ‘Forza’/ whatever, just in waggle form,” our source told us. Such idea-generation has not gone smoothly. “The whole thing is a colossal clusterf—,” the source said. “[Microsoft] marketing just want it so they can match the Wii point for point. The biggest parts of their marketing materials outline how easy it would be for third parties to port their Wii games to the 360.”

In addition to designing the interface for the controller, Rare has also fleshed out Microsoft’s take on Nintendo’s Mii avatar concept, the source said. Microsoft’s Miis are designed to be associated with any game that incorporates the controller and create a standard “look” for the games. The avatars aren’t tied to a controller when in use, as Xbox Live profiles currently are.