Double Fine studio head Tim Schafer and director Nathan Martz discuss their upcoming game for Kinect, Sesame Street: Once Upon a Monster, in this Wired.com video interview.

Displayed as part of Microsoft’s E3 Expo press conference Monday morning, Once Upon a Monster is a game featuring the lovable Muppets. Parents and kids can play together using simple gestural controls. Martz says the game is about teaching kids emotional values, not drilling letters and numbers into their heads. Kinect allows the entire game to be played with simple hand gestures and voice, perfect even for the youngest kids.

Once Upon a Monster will be available later this year for Xbox 360.