UPDATE: EFF is happy to report that in recent interviews, Microsoft has demonstrated enthusiasm for the creativity of hardware hackers and researchers, ultimately embracing the first wave of Kinect innovation.

When Microsoft announced that it was launching a webcam-style peripheral for its Xbox360 that would allow users to interact with the game system without the need for a game controller, the excitement was not limited to gamers. The Kinect, which allows a user to control games through gestures, speech, and presented objects or images immediately intrigued the hardware hacking community. The folks at AdaFruit Industries gushed, “Imagine being able to use this off the shelf camera for Xbox for Mac, Linux, Win, embedded systems, robotics, etc. We know Microsoft isn’t developing this device for FIRST Robotics, but we could!”

Given the range of possibilities for this technology, it is no surprise that it was immediately reverse engineered. Like the CueCat and Aibo and many other technologies before and after them, the Kinect has so many cool potential new uses that limiting those who can use it to those approved by Microsoft would be a tremendous waste and a lost opportunity for innovation. After all, reverse engineering is a crucial component of any healthy technical ecosystem.

To that end, AdaFruit offered a prize to the first person to write an open source driver for the Kinect. They then raised their bounty to $3,000. Days later, Spain-based hacker Hector Martin claimed the bounty. Within a day, hardware hackers were employing the open source driver to put the Kinect to all kinds of imaginative uses, including a multi-touch interface.

Microsoft’s initial response was to rattle its sword. A Microsoft spokesperson told CNET, “With Kinect, Microsoft built in numerous hardware and software safeguards designed to reduce the chances of product tampering. Microsoft will continue to make advances in these types of safeguards and work closely with law enforcement and product safety groups to keep Kinect tamper-resistant."

Microsoft should keep its sword in its scabbard. The Kinect technology is getting rave reviews and generating a real buzz. Microsoft could blow all of this goodwill if it tries to shut down independent innovation around the Kinect, as Sony learned when it tried to shut down innovation around the Aibo. Fans were so outraged that Sony was ultimately spurred to release a programmers kit for it. Microsoft should learn from Sony's experience and embrace its role as the creator of a new platform for innovation by supporting efforts like those of AdaFruit and hacker Hector Martin—after all, every hacker and every user of a hacked Kinect will have to buy the technology first.

Trying to stop tinkering won’t work anyway — the street finds its own uses for things and the potential uses for this in-home robotic device start from the prestigious FIRST contest and reach as far as the imagination will take them.

AdaFruit has now offered an additional $1000 bounty for a tool that makes it easy to use the Kinect on LINUX systems and Matt Cutts, the head of Google's webspam team, is offering another $1000 prize for the coolest tool, demonstration, or application using the Kinect.

Adafruit also made a donation of $2000 to the Electronic Frontier Foundation in the midst of this, citing our extensive work in support of coders’ rights and our efforts to preserve the freedom to tinker in the face of the anti-circumvention provisions of the DMCA. We greatly appreciate the support.