Microsoft plans to have its Project Natal motion-capture game controller available for sale in time for the holiday season.

The device is a camera that recognizes user gestures and body contortions as a means of controlling gameplay. Sony’s Move, announced at the Game Developers Conference in March, is more like Nintendo’s Wii system, with a controller that users hold in their hands, a sensor to track its movement and a camera to project it all into the game.

A host of game developers, including “Rock Band” developer Harmonix, is expected to release games that use these new motion-capture controllers as early as this year, although most titles aren’t expected until 2011. Sources say they expect developers to unveil some of these new titles at the E3 video-game conference in June.

Dance-based games will feature heavily in that rollout and should provide a much-needed shot in the arm to the music-game market. Sales in the category plummeted last year as interest in the “Guitar Hero” and “Rock Band” franchises faded. The problem, according to

Jesse Divnich, vice president of analyst services at Electronic Entertainment Design and Research, is that there wasn’t any innovation in features within the genre despite a flood of new content. And content, Divnich says, will sustain a franchise for only so long.