Technological advancements in the video game space will soon redefine how many consumers both receive and interact with their content.

Case in point: Sony Computer Entertainment – and just last month, Nintendo – have inked content deals with Netflix for streaming movies and TV shows on the PlayStation 3 and Wii consoles, and an article in the New York Times last month also revealed that Disney was in talks with Microsoft to stream sports net ESPN directly on its Xbox 360 console.

Microsoft and Sony unveiled plans at last year’s video game convention E3 Expo to launch impressive new technologies this coming fall, but it’s clear they’ve since been forced to up their game in response to the massive success of the Nintendo Wii, which revolutionized gameplay through the introduction of its innovative motion controller in 2006. The Wii has been on fire since it hit the market and unit sales have surpassed 56 million worldwide, making it the fastest-selling video game console in history and ushering in unprecedented waves of all-ages gamers with cross-demo titles such as Mario Kart Wii and Wii Fit.

Sony’s higher-priced PlayStation 3 and Microsoft’s Xbox 360 have a larger following of hard-core gamers, but they’re now looking to snag a piece of the motion-control space Wii has captured – one that’s struck a chord with the growing number of casual players and, in the process, edged the industry closer to eradicating the couch-potato gamer stereotype.

Microsoft may be making the boldest move of all, with plans to ditch physical peripherals and controllers completely with Project Natal (pronounced ‘nuh-TALL’) for Xbox.

Boasting the world’s first sensor to combine an RGB camera, multi-array microphone and custom processor, Natal tracks full body movements, responds to commands and directions, and even has a memory for faces and voices. This opens up a wealth of possibilities for navigating non-gaming home entertainment content, like channel surfing controlled with the simple wave of a hand, or browsing show listings with the flick of a finger. (Not to mention the enormous possibility for other motion-capture applications, such as post FX and animation.) Hopefully, cable providers will take note for their currently clunky EPGs.

In campy promo videos for Natal, Microsoft demonstrates the whole family getting in the game. In one, a girl grasps an invisible steering wheel, expertly maneuvering a race car to a pit stop. She rests her arms as her brother leaps into action, going through the motions of a rapid tire change. Kids input virtual versions of their skateboards by holding the object up to Natal’s camera and uttering the command, ‘Scan.’ The tech responds by generating a virtual likeness of the physical board for in-game play. Other vids demonstrate possible social media and retail applications.

Microsoft had set a Natal release date for this fall and it appears (at least for the moment) to have taken the lead on realizing a futuristic Minority Report-esque interactive style.

Sony Computer Entertainment, on the other hand, will be competing with Nintendo head-on via its tentatively named Motion Controller for the PS3. Sony previewed prototypes of the new wand-like device topped with a glowing orb at E3 to demonstrate its über-precise tracking movements. The PlayStation Eye, Sony’s proprietary digital camera, reads signals from the device, and on-screen the Motion Controller can then become anything from a baseball bat to a bow and arrow, opening up a wealth of possibilities for game and interactive designers.

With files from KidScreen