The "environmental display" device will use advanced projector technology to spread a 360-degree view of the game world onto a room's walls. The technology would be closely integrated with a 3D camera and Kinect sensor, using the player's body position and posture to inform what parts of the game world to display.
As the Microsoft patent states, "Interactive media experiences, such as video games, are commonly delivered by a high quality, high resolution display. Such displays are typically the only source of visual content, so that the media experience is bounded by the bezel of the display.
"Even when focused on the display, the user may perceive architectural and decorative features of the room the display is in via the user's peripheral vision. Such features are typically out of context with respect to the displayed image, muting the entertainment potential of the media experience.
"Further, because some entertainment experiences engage the user's situational awareness (e.g., in experiences like the video game scenario described above), the ability to perceive motion and identify objects in the peripheral environment (i.e., in a region outside of the high resolution display) may intensify the entertainment experience."
The patent also incorporates the next Xbox's rumoured Kinect 3D glasses, codenamed Fortaleza. The Kinect glasses will allegedly add depth to the projected wall images, providing a 3D view of the game world in every direction.
Microsoft is also rumoured to be working on a Kinect 2.0 sensor to launch with its next console, featuring improved tracking, dedicated processing, and with better play space and high definition.
The next Xbox is expected to launch sometime in late 2013, though recent manufacturing difficulties may cause the system to be delayed.