Rumors among experts have it that Microsoft is working hard to release a dashboard update that'll increase Kinect's precision to the point of detecting finger movements and hand rotation.
In its current state, Kinect cannot detect such minute features because its depth sensor operates at a limited resolution of 320*240 at 30 frames per second. According to online reports, the depth sensor actually operates at a higher resolution, but has to downscale it before sending it to the console in order to limit the data transfer rate to 16 MB/s .
Said 16 MB/s is actually less than the console's USB port's maximum throughput of 35 MB/s. Microsoft couldn't give Kinect a higher transfer rate in order to allow other USB devices to be connected simultaneously.
According to the reports, Microsoft researchers are working on better compression algorithms and USB port switching technology that would allow the depth sensor to transmit its data at 640*480 resolution without flooding the USB port.
