Microsoft’s 3D motion control camera has been a subject of rumor for weeks, and now The Wallstreet Journal has sources that have said Microsoft is indeed working on the 3D motion control camera for the Xbox 360.

This is obviously a move by Microsoft to get back some of the market that the Nintendo Wii has dominated since it was released in 2006. With a 3D motion control camera, Microsoft might be able to score some of the casual gaming market back that Nintendo now pretty much controls.

The new 360 motion control camera seems to have an advantage on the Nintendo Wii as well. You must hold a Wii-mote to communicate your motions with the Wii, but according to anonymous sources, you don’t need anything when using the 360 camera. You just move your arms and legs and the 3D motion control camera automatically catches your movements.

It seems the rumors of the 360 3D camera came about when an Israeli newspaper reported that Microsoft bought a startup company in Israel called 3DV systems, which has developed a 3D camera and holds all the patents to it. The Wallstreet Journal’s anonymous sources also said consumers may see the camera as soon as the popular video game conference, E3, but it probably won’t be available until sometime next year.

TGR will keep you updated as soon as we know more about the rumored 3D motion control camera for the 360. Who knows? You may just see it in our E3 coverage on June 1-5.