While many of us rush out today to get a new dose of virtual reality with the just released Sims 3 others are already a step ahead. Yesterday during Microsofts E3 press conference, jaws hit the floor when Peter Molyneux, lead designer of the Lionhead Studios and responsible for innovative games like Dungeon Keeper, Populous, and Black & White,  introduced Project Milo. A virtual AI in the form of a boy, who you can interact with anyway you want. Milo will react, even emotionally, on what you say and do. The project is realised with Natal, Microsoft’s new hands-free controller for the Xbox. But just see for yourself:

 
Kahran posted this in the board and there is already a discussion about how people might use it in ways which are not intended ;) You could do some interesting stuff with games like the Sims already and even if the possibilities are limited if you Milo will be published for the Xbox only and not for PC where it could be modded, people will try to get some pervness out of it.

Of course, the pedo potential for this is HUGE. Everyone can have their own virtual boy and of course, the internet is already swarming with ‘Milo, take down your pants’, ‘I’d masturbate with him’ and ‘I’d show him my penis’. -- Kahran

Another valid aspect was mentioned by cosmicbus: Peter Molyneux love to talk about huge things but every so often the actual game turns out to contain only half of his ideas ‘cause the rest was just to ambitious for the reality of tech today. Some people have even suggested that the demo in the video above was manipulated by someone controlling the boy. However, it will defiantly take a while until we will be able to interact in such a way with an AI but at least we have something to look forward to.