Microsoft in talks to acquire Israeli VR startup

Microsoft is reportedly negotiating to acquire Israeli startup 3DV Systems for about $35 million, according to Haaretz, Israel's oldest daily newspaper.

3DV Systems is known for developing "virtual reality" imaging technology for digital cameras that it sells, called ZCams (formerly called Z-Sense), and the company generally focuses on the gaming market. ZCam lets players control the game using body gestures alone, similar to PlayStation's EyeToy, Microsoft's Vision or Nintendo's Wii.

3DV Systems argues that its system is superior because the user does not need to wear special gear to use and experience the technology.

By connecting the dots, it's clear Microsoft may want to augment the offerings of its Xbox 360 gaming system. But there's more to the technology.

ZCam is also useful in video-conferencing: for example, it allows you to alter the background behind a subject. The user can also place presentations behind them as a background.

Haaretz reports that 3DV Systems has raised $38.6 million in financing to date, according to IVC Online. The company is owned by Elron, a member of Nochi Dankner's IDB group; venture capital funds Pitango and Kleiner Perkins Caufield & Byers; and RDC Rafael Development Corporation.