I've made a working prototype to see if the idea is going to work. I've used the farseer physics engine. Here's a screenshot (I need to add shadows)...

There will be 4 different colour cogs which match the colours on the xbox 360 controller. You will hold down that colour and use the analog stick to rotate all cogs of that colour. There will of course be different size cogs, with a different number of cutouts.
There will be a number of other objects, i.e. something to move the chip upwards, something to change the chip colour, maybe a bin which can contain only a number of chips.
I'll probably have two game modes, one will be Puzzle where there are around 30-40 different levels, each where you have to guide a fixed number of chips down in the correct order. The other mode will be Arcade, which will be faster paced and will be continous.






