System and method for interactive three-dimensional position tracking

A system and method for tracking the x, y and z coordinates of a position of an input device in an interactive computer system is disclosed. An image sensor situated on the input device captures images of an electronic marker displayed on a display screen. As the position of the input device changes, the features of the electronic marker as captured by the image sensor also change. Images of the electronic marker captured during game play are compared to a calibration image of the electronic marker to determine current x, y and z coordinates of positions of the input device. The game display is updated to reflect the movements of the input device.