It will also have to drastically downplay the importance of footwork. In a real swordfight, where to put your feet is nearly as important as where to put the sword.
Omnidirectional treadmill? http://en.wikipedia.org/wiki/Omnidirectional_treadmill
About 3:50 into the video entitled "The weeds" Mr. Stepehnson says "We're going to start with an off-the-shelf controller that anyone can buy today. This eliminates the risk that we'll blow this by failing on some ambitious custom hardware project. From there we'll iterate based partly on your feedback. "
So no treadmills at first.
That said, the concept of different styles of swordplay is great - and having more 'realism' in that is something I think is pretty admirable.
Would anyone want to play a war simulator FPS that starts with a cutscene of the Normandy landings and has a 50% chance of immediately being cut down by a machine gun whereupon the game quits and deletes itself off your hard drive?
Arguably more important. I fenced epee in university, and our coach was a little bit old school -- we went weeks just doing footwork before getting a weapon put in hand.
I mean, do you really think COD is "real combat"?
"most couldn't play" - but they could learn to play (as long as losing isn't fatal for the player). some games strive to be realistic above all else (some car racing games), because they are tailored for the ultra-enthusiasts.
I took a not-for-credit intramural fencing and kendo classes back in college, and 3/4's of both classes was about learning footwork and movement.
Sword fighting also generally comes down to a few seconds of motion and whoever judged their opponents movements better. Neither of these would be present in a game that wasn't full motion capture.