Accidental falls remain an important problem in older people. Stepping is a common task to avoid a fall and requires good interplay between sensory functions, central processing and motor execution. Increased choice stepping reaction time has been associated with recurrent falls in older people. The aim of this study was to examine if a sensor-based Exergame Choice Stepping Reaction Time test can successfully discriminate older fallers from non-fallers. The stepping test was conducted in a cohort of 104 community-dwelling older people (mean age: 80.7 ± 7.0 years). Participants were asked to step laterally as quickly as possible after a light stimulus appeared on a TV screen. Spatial and temporal measurements of the lower and upper body were derived from a low-cost and portable 3D-depth sensor (i.e. Microsoft Kinect) and 3D-accelerometer. Fallers had a slower stepping reaction time (970 ± 228 ms vs. 858 ± 123 ms, P = 0.001) and a slower reaction of their upper body (719 ± 289 ms vs. 631 ± 166 ms, P = 0.052) compared to non-fallers. It took fallers significantly longer than non-fallers to recover their balance after initiating the step (2147 ± 800 ms vs. 1841 ± 591 ms, P = 0.029). This study demonstrated that a sensor-based, low-cost and easy to administer stepping test, with the potential to be used in clinical practice or regular unsupervised home assessments, was able to identify significant differences between performances by fallers and non-fallers.