Update: Sega has announced that Sonic Free Riders is, in fact, a full retail title.

On Sunday, June 13, Microsoft will host its Project Natal event -- you know, the gala event with Cirque du Soleil? We're betting we'll get details on launch price and date for Project Natal (not to mention its real name) there, but ahead of that event we've got some interesting news on an upcoming Natal title, care of our Joystiq Superspy™.

We're told that Sega is preparing an Xbox Live Arcade game for Project Natal, titled Sonic Free Riders. As you may have guessed, it's a motion-compatible entry in Sega's racing series. Players will supposedly steer an on-screen avatar via bodily movement, and will acquire weapons by reaching out toward the screen, and attack other racers by motioning towards them.

It all sounds very intuitive, but will it be fun? We'll let you know in a few weeks when we touch down in L.A. for E3 2010.

This article was originally published on Joystiq.

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