Turns out the rumor was true, Avatar Kinect is coming to the Xbox 360 this spring (for Xbox Live Gold members, at least). Details are sparse -- a place where you can virtually hang out with your "friends" -- but Kinect is shown to now be able to detect facial gestures like eyebrows, smiles, and laughs. Impressive, but after all we've seen with the Kinect hacks, can't say we're too surprised the camera's capable of such detection.
Gallery: Xbox AvatarKinect
