The wrist controller users multiple infrared cameras to track the movement of your hands, along with a handful of accelerometers and gyroscopes that allow a device to locate you in space without the need of a sensor bar. From there, as is evident in the video, your hand can do virtually anything, and you can be anywhere without having to worry about how close or far away you are from a television or display.
You can even gesture and control a device such as a tablet without even touching it. Yu still might need a Kinect cam for games that track entire body movement, but for racing games and first-person shooters, this control setup seems awesome. [Microsoft Research]