Shown off at PAX East 2012, this is Crimson Dragon and if it reminds you of a Kinect-based Panzer Dragoon, there's good reason. Not only is Land Ho, which handled the PS2 version of that game, working on this one, Panzer Dragoon's creator, Yukio Futatsugi also is involved.
If it's not clear in the video, you're riding the dragon, not playing the dragon itself, so hand motions seem to correspond with how you'd use the reins for such a beast. Microsoft is pitching this as more of a core gaming experience for its Kinect lineup. Developers are shooting for a summer release.