A Microsoft Research team working in Cambridge, UK, has demoed a wrist-mounted device named Digits, which tracks the movement of your fingers to register hand gestures. It works by shining LEDs on your hands and tracking the reflected rays using a camera.
The device is currently quite bulky, but the researchers claim that it can be reduced to the size of a wristwatch before launch, and it will be wireless where now it must be wired to a computer.
Digits is apparently far better than its predecessors at continuous recognition, or ability to rapidly sense changing hand movements and analyse them in sequence. This could aid it as a form of motion control for video games, only one of its many potential uses.
Have a look at this video to see the early prototype in action: