Updates to this story
The first interactive sex game is currently being developed for the Kinect.
The game is being worked on by Australian sex game developer ThriXXX, the company behind 3D SexVilla and other titles.
The game is made possible by recent hacks for the Kinect, including an open source driver project called libfreenect which ThriXXX is employing. OpenCV is also being used and the game should work with Windows 7 as opposed to the Xbox 360, the latter Microsoft would be unlikely to allow.
The software is in early alpha and is expected to released in 2011. ThriXXX plans to incorporate the Kinect support into all of the games based on its engine.
Since all you get to be is a dismembered hand, it may be particularly appealing to those who have a thing for The Addam's Family's Thing.
We did a survey of one pervert and asked if they would buy this game. 100 percent said yes.
A video demonstration of the software in action can be found here. Pretty obviously NSFW.