Microsoft reportedly 'dumbed down' Kinect's capabilities in a bid to reduce the financial risks of launching the motion-sensing peripheral.
Wary of making a loss on each $150 unit sold, Microsoft is said to have ditched an internal processor chip in favour of a software solution. In other words, the Xbox 360 hardware takes on some of the work Kinect would otherwise have done itself.
The chip in question was reportedly responsible for processing Natal's bone system, which originally enabled it to recognise the joints of the fingers and toes. The downgrade meant that Kinect's resolution was lowered to 320x240, rendering it incapable of doing so, and hence unable to read sign language as it was originally able to do.
While the platform holder hasn't admitted to reducing Kinect's capabilities for cost reasons, it told Kotaku: "Microsoft files lots of patent applications to protect our intellectual property, not all of which are brought to market right away. Kinect that is shipping this holiday will not support sign language."