According to the patent application, the device can "utilise one or more sensor from a collection of sensors to determine an orientation or gesture in connection with the wand.”
It is also said to be able to detect the person holding it and automatically display their avatar on screen, and communicate in "a manner similar to a cellular phone or walkie-talkie with other wands," reports TachFlash.
While Microsoft has chosen not to comment on the patent application, growing speculation that the firm is working on an Xbox 360 motion sensing camera could mean that the wand peripheral is no longer in development.