The IllumiRoom team at Microsoft Research released a demonstration of their new technology designed for the next generation Xbox console. The system currently works with a Kinect sensor and a wide angled projector. Eventually, the system will be a small coffee table based unit.
The IllumiRoom is able to expand the game to reach beyond the television screen and take over the living room. The projector is able to produce a variety of effects, allowing the surrounding living room to match the art style of the game, expand the peripheral field of view to include the rest of the room and more.
The project was a joint effort between Microsoft Research and the University of Illinois at Urbana-Champaign. The full research paper can be found on the official Microsoft site.