Microsoft big cheese Shane Kim has said Rare is working with Xbox 360 motion-sensing technology Project Natal.
"Rare is intimately involved with Project Natal in a number of different dimensions. They're doing an awful lot of work, even outside the traditional game space, I would say," Kim told Kotaku.
"Unfortunately I can't go into a lot of detail about that. Rare is alive and well and really having a broader impact on the entire Xbox world than just doing the games they traditionally have in the past."
Microsoft has used internal studio Rare to work on top secret projects before; the Viva Pińata creator was behind the New Xbox Experience Avatars, which launched last November.