Seems like a narrow way of looking at it
"Does this mean Google is working on some kind of new game or game-like service?"
This is where the article went off on a tangent for me- the guy seems like he's fascinated with interfaces in general, and Kinect is a fascinating interface. I can't even begin to imagine the possible interfaces Google are dreaming up, but I very much doubt they're constrained in the realm of a games console.