Japan's Nikkei newspaper has confirmed that Project Café's controller will make use of a touch screen panel and built in camera.
According to the report, translated by Andriasang, the controller will provide "tablet-like controls to games," and users will tap the touch panel to control characters on the television.
The report also claims the controller can also be used as a portable game device, and it has a 6-inch screen with a rechargeable battery and a camera. The camera can be used, as reported before, in certain games to make an avatar of one's self.
Nikkei also said Project Cafe will be released in the latter half of 2012.
We'll all know for sure come Tuesday during Nintendo's E3 press conference.