In contrast, Natal is a purely optional add-on, and I'm not sure on this but I'm not sure it will be possible to control non-Natal-enabled games or the Xbox 360 dashboard without a traditional controller. This way, game developers can choose the controller paradigm that makes sense for the game, and the Natal ecosystem can grow organically, rather than have it foisted upon people. Maybe this is a recipe for languishing and fragmentation, but I can see how this strategy could work out better for Microsoft than Nintendo's did for them.
The technology could also be intrinsically much better, who knows?
Microsoft can address this by stepping up and making Natal a required accessory for some hit game. The trick then is finding Natal's "killer app", which we have yet to really see.
It's going to be tough - see Microsoft's FF Steering wheel and the 360 webcam as evidence. The wheel is confined to racing games and isn't useful for much more, and the webcam is fun for a few nights but doesn't have a lasting appeal. The only webcam game I'm aware of was the one shipped by MS, and it's not very fun (and very tiring on the arms). Both devices are successful in their own scenarios, but are still niche products (how many games have you seen that use the camera?).
Case in point: Force Unleashed has a very limited set of motions (vertical/horizontal swings). This game should have been the killer app for the Wii, but it was really awful.
Natal proposed to have the accuracy and range of motion an imaginative developer could really exploit.
disclaimer: I own a Wii