The Kinect's nearly flawless facial recognition system is a fun little way to sign in to your profile, but soon the device may start identifying what's happening in your living room and sending the information back to Microsoft's computers. Before you imagine a 1984 style conspiracy where your complaints about the government will be broadcast directly to the Ministry of Kicking Your Ass, Microsoft says they would use the information to target advertising.
Dennis Durkin, chief operating officer and chief financial officer for Microsoft’s Xbox video game business, told investors today that Kinect presents "business opportunities for targeted game marketing and advertising."
“We can cater which content we present to you based on who you are,” Durkin said. “How many people are in the room when an ad is shown? How many people are in the room when a game is being played? When you add this sort of device to a living room, there’s a bunch of business opportunities that come with that.”
I'm not sure why Microsoft would need to target advertising using the Kinect. If you just looked at the games that were being played, you'd get a good enough idea of what to advertise. If someone is playing Fallout: New Vegas, it's probably a young male who's a hardcore gamer. If someone is playing Your Shape: Fitness Evolved, it's probably a slightly overweight lady.
Also: Kinect is watching you fap.
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