On land, Kinect provides 3D body tracking to detect player movements for games as well as some creative PC programmes.
In space, the Kinect components will allow satellites to detect each other's movements and co-ordinate using spatial awareness to link together.
The first satellites to use the technology will be twin STRaND-2 models. They are rather small for satellites, about a half-metre in size, and will separate in orbit before running safety checks and reconnecting.
If successful, it will mark the first time such small satellites have been able to dock together in space. In-orbit docking has previously been reserved for much larger crafts.
"Once you can launch low cost nanosatellites that dock together, the possibilities are endless - like space building blocks," said Surrey Satellite Technology Limited project lead Shaun Kenyon.
Microsoft has not replied for comment on whether Dance Central 3 for Kinect will now consist exclusively of the 'Moonwalk' dance move.