With all of the talk about the use of Kinect for applications outside of the Xbox 360, it has become obvious that the add-on is able to do a lot more than what Microsoft and 3rd party developers have done so far with the device on the Xbox 360.

The biggest thing that appears to be on the horizon for Kinect on the Xbox 360 is an increase in resolution and color depth. The Kinect device itself does support a 640x480 resolution, but currently Microsoft has limited the resolution to 320x240 with a transfer rate of about 15MB/s.

The firmware in the Kinect can be upgraded; and sources tell us that Microsoft is apparently working on additional tweaks that (once perfected) will give developers the options of using Kinect in the 640x480 and increase the color depth at which the device functions.

The firmware update (once deployed) would increase the amount of data transferred about fourfold, meaning that the Kinect sensor would have to be able to transfer about 35MB/s, which the device should be able to handle; but the processing and associated work needs to be tweaked in the software to prevent lag and maintain tracking accuracy. According to whispers we hear, it is still up in the air on how well Kinect would function in the higher resolution mode, which means that with four times the data to deal with, it might not be useful for some gaming applications and the lower resolution might be a better option for developers.

The good news is that because of the excellent sales of Kinect, interest continues to be higher than ever with developers on pushing the limits of what is possible with the device. Because the firmware on the Kinect it is upgradable, it does offer Microsoft the ability to tweak and allow the firmware to evolve to do more things with Kinect. Sources tell us to expect a firmware update early next year that will improve performance and perhaps unlock some new abilities for the device at the programming level.