The IceCube Neutrino Observatory is a cubic kilometer volume neutrino detector installed in the Antarctic at the geographic South Pole. Neutrinos are detected through the observation of Cherenkov light from charged relativistic particles generated in neutrino interactions, using an array of 86~strings of optical sensor modules. Currently an upgrade to the IceCube detector is in preparation. This IceCube Upgrade will add seven additional strings with new optical sensors and calibration devices. A new camera system is designed for this upgrade to be installed with the new optical modules. This camera system will study bulk ice properties and the refrozen ice in the drill hole. The system can also be utilized to provide information on the detector geometry including location and orientation of the optical modules and cables that can be used to calibrate IceCube Monte Carlo simulations. A better understanding of the refrozen ice in the drill hole including the complementary knowledge of the optical properties of the surrounding glacial ice will be obtained by surveying and analyzing the images from this system. The camera system consists of two types of components: an image sensor module and an illumination module. The image sensor module uses a CMOS image sensor to take pictures for the purpose of calibration studies. The illumination module emits static, monochromatic light into a given direction with a specific beam width and brightness during the image taking process. To evaluate the system design and demonstrate its functionality, a simulation study based on lab measurements is performed in parallel with the hardware development. This study allows for the development of the preliminary image analysis tool for the system. We present the prototype of the camera system and the results of the first system demonstrations.