The Guncon 3 utilizes two infrared LEDs as markers, placed on the left and right sides of the screen. An image sensor in the muzzle tracks the markers as reference points for determining where the gun is pointing on the screen. As opposed to the Guncon and Guncon 2, which are only compatible with CRT-based displays, the Guncon 3 supports a wide variety of display types, including LCD and Plasma.
The Guncon 3 features a "sub-grip", mounted underneath the barrel and extending to the left side for use with the left hand. On the sub-grip is an analog stick and two shoulder buttons, like in a modern gamepad. At the back end of the gun barrel is another analog stick and two buttons, B1 and B2, underneath. Another two buttons, C1 and C2, are placed along the left side of the barrel. The analog sticks allow the player to play first-person shooting games with manual aiming/firing of the light gun.
In regards to appearance, all Japanese Guncon 3 controllers feature a black coloring, though due to US toy gun laws, the US/PAL release of the Guncon 3 controllers are molded of bright orange plastic. This controller has been criticised for being uncomfortable for left-handed gamers.
Source: Wikipedia, "Guncon", available under the CC-BY-SA License.
Gun Controller designed by Namco for Playstation 3, update of the Playstation G-Con 45 and Playstation 2 G-Con 2.