According to reports, technology similar to the upcoming Project Natal was offered to Nintendo way back in 2007, but they declined it due to the high cost. No surprises there then.
<blockquote>While the Wii remote is pretty impressive, itâ€™s nothing like the upcoming PS3 motion controller and Xbox 360â€™s Project Natal. The sad point is that the Project Natal technology was apparently offered to Satoru Iwata â€“ Nintendo boss â€“ back at the end of 2007.
CVG are reporting that Satoru Iwata had a chance to make something from the tech that became Project Natal, but his reason for turning it down was that he believed the cost to mass-market would be too much.</blockquote>
News Source: <A href="http://www.product-reviews.net/2010/01/26/nintendo-wii-almost-had-xbox-360s-project-natal-technology/" target="_blank">Product-Reviews</a>