I am designing a climbing wall game that gets what holds are being used as inputs. I'm currently planning on using a Kinect sensor to tell where hands are relative to holds and capacitive touch sensors embedded in the hold to verify that the climbing hold is actually in use. But I'm worried that I'll get too many false negatives if someone grabs a climbing hold in an unexpected way. Any thoughts on other solutions? maybe a pressure sensor?
You question asks for the "best way" but there's no pat answer without understanding the requirements (cost, reliability, etc).
Capacitive touch sensors seem challenging. If the "holds" are metal, you'd have to insulate them from the climbing wall. If nonmetallic, they don't work as capacitive sensors unless you embed wires/plates close to their surface. And climbing shoes might interfere with capacitive touch effects.
I would suggest you consider a pressure sensor, not to directly sense the pressure of a hand against the "hold", but of the load being carried by the hold. You can buy low-cost "force-sensitive resistors" that are easily read by an Arduino analog input. [
You could embed one like a shim between the hold and the climbing wall, putting it at the bottom edge of the hold below any fastening bolts. Calibrate them with no climbers present so you cancel out the force of the bolts fastening the holds to the climbing wall. When a climber's weight is added to the hold, the sensor will be compressed and the resistance will drop. I think this could work quite well.