bye-bye Wii with your ugly games...

"Microsoft was working on this "Magic Wand" years before the Wii came out - in 2004."
Well according to the article the patent was filed in 2007. If details of the technology were already published in 2004 I think they have a problem

Hey, its Microsoft, they must steal ideas, right? Microsoft was working on this "Magic Wand" years before the Wii came out - in 2004.

http://research.microsoft.com/en-us/um/people/awilson/wand/default.htm

Maybe Nintendo found that idea interesting...

The Sword of Gryffindor awaits...

If you believe that the Patent Office does much if anything by way of due diligence on incoming patents, you don't understand the process!
These days, they simply register the patents, and leave it to the courts to adjudicate on contended claims.

I don't think it is for gaming, it sounds like it is targeted more at integration into their "surface" technology.