Microsoft's IllumiRoom concept is targeting a design that can sit on users' coffee tables and wirelessly connect to next-gen consoles.
That's according to new details which have arrived ahead of this week's CHI 2013 conference in Paris.
According to Microsoft, IllumiRoom can "change the appearance of the room, induce apparent motion, extend the field of view, and enable entirely new game experiences."
Combining a projector with Kinect, game effects such as falling snow and explosions can be projected into the living room, while illusions can appear to distort furniture around the television.
The video below - the latest since IllumiRoom's CES 2013 reveal - offers more details on how the proposed features work.
"Our vision for a fully developed IllumiRoom system includes an ultra-wide field of view device sitting on the user's coffee table, projecting over a large area surrounding the television," Microsoft Research explains in a CHI 2013 document.
"The device would be connected wirelessly to a next generation gaming console as a secondary display. The ultra-wide field of view could be obtained with an ultra-short throw projector, or by coupling a standard projector with a spherical/parabolic mirror.
"The room geometry could be acquired with a depth sensor or a structured light scan."
Currently Microsoft's prototype utilises a wide field of view projector (InFocus IN126ST) and a Kinect for Windows sensor.
Because the prototype is limited by the field of view of the Kinect and projector (~57 horizontal FOV), the system is mounted above and behind the user's head.
According to Microsoft Research the system is entirely self-calibrating and is designed to work in any room.
While effects that extend gameplay imagery require access to source code, IllumiRoom can track controller inputs for a variety of illusions, as demonstrated in Portal 2 above.
The IllumiRoom team concludes that many factors, including final form factor, cost and computational requirements, must be determined before the concept can be considered for commercial release.
"While there are many unanswered questions regarding peripheral projected illusions, we hope we have demonstrated that they are worth answering."
Microsoft has confirmed it will reveal its next-gen plans at a special event on May 21.