Xboxfamily writes that according to ‘what they’re hearing’ from Saratoga, California, Microsoft is working on a motion sensing feature for Xbox 360. They say it will likely be a 1st party add-on and will be attachable to the 360’s controller, probably similar to the chat pad.

According to Xboxfamily, Microsoft has contracted Gyration for the job, the company behind the prototype designs for the Wii-mote and the motion-sensing remote for Microsoft’s Media Center.

We’ll file this in the rumor section for now, since Xboxfamily says nothing about their source(s). But third party motion sensing add-on’s for Xbox 360 are already being produced, so Microsoft releasing an official add-on doesn’t sound that far fetched of an idea at all.

If this rumor pans out, the release date for this should be Q4 2008.