While Kinect's hardware is locked in and finalised, the firmware that controls it is flexible and able to be upgraded. And that's exactly what Microsoft is planning on doing, according to a report on Eurogamer.

It's being reported that Microsoft is currently investigating ways of improving the compression technology that dictates how much code can run through the peripheral at any one time. This would mean an increase in the camera's resolution, which while currently restricted to 320x240 resolution could be unlocked to run at 640x480.

This would not only mean a clearer picture, but would also mean Kinect games would be able to track a user's individual finger movements, something only possible at the moment via third-party hacks.

Apparently the current limitations are in place because of the console's USB controller interface, which has to be kept open enough to support other USB-based peripherals like battery rechargers.

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Microsoft's work on improving Kinect would thus focus on getting more code through the "gate" reserved for the motion-sensing camera.

We've contacted Microsoft for comment, and will update if we hear back.

Source: MS quadrupling Kinect accuracy [Eurogamer]