Looks like Nintendo bossman Satoru Iwata was shown Natal's tech at one point and passed on it due to latency and price-point reservations, according to CVG.
Speaking anonymously to the site, a source at Nintendo HQ in Japan stated that before Israeli firm 3DV Systems was purchased by Microsoft, it showed an early demo of the technology to Iwata during 2007.
While impressed with the tech, Nintendo passed on it, as Iwata did not feel the tech was a fit for Wii.
"Iwata-San only ever invests in something he can guarantee will work for a Nintendo audience," the exec told CVG.
"3DV showed off a camera that detected motion in 3D, and had voice recognition - but Iwata-San was unconvinced he could sell it at a Nintendo price point. He also had some worries around latency during gameplay.
"Honestly - I've heard Iwata describe the prototype he saw at length, and it's definitely Natal. What we witnessed at E3 was smaller and the facial [reading] stuff had improved, but it's the same technology.
"We remain unconvinced Natal will deliver on the more sophisticated elements of what Microsoft is promising at the price they're aiming for."
While not admitting that Nintendo had looked at this particular tech before, Reggie Fils-Aime stated back in June that Nintendo was "very familiar with that technology" and that he had "personally seen a lot of iterations of similar technology".
Microsoft, though, has maintained that the tech for Natal was built "in-house", despite the purchase of 3DV being confirmed back in June 2009.
Natal's expected this year for around £50.