Wedbush analysts Michael Pachter and Edward Woo expect most existing Xbox 360 owners to wait until Kinect's price drops before picking one up, but estimate that early adopters could still drive sales of two to four million units by March 2011.
That range would account for 5 to 10 percent of existing Xbox 360 owners, and specifically refers to the standalone motion control solution that was recently priced at $150. Microsoft will also be selling a $300 Xbox 360 Kinect bundle packaged with a 4GB console.
Because that bundle is only $100 more than the price of the same Xbox 360 model sans Kinect, Pachter and Woo believe the Kinect's initial $150 price point has a built-in buffer that will allow Microsoft to cut the device's price as needed -- and the analysts think that will happen as soon as early next year.
Although they see the Xbox 360 bundle as a good value, "that standalone Kinect, at $149, is not as good a value as a standalone Wii at $199, which comes with two games (instead of one) and a much deeper library of content," assert the analysts, countering Microsoft's claims today that its Kinect represents a better motion control value than Nintendo's console.
Still, the standalone device is attractive compared to Sony's Move, they point out, which they total at a standalone price of $180, which combines the $100 standard bundle with an extra $80 for a full second controller.
"We think that the Kinect bundle with the new [Xbox 360] SKU has a significant value advantage over Move plus the PS3, coming in at $299 compared to $479 for the Move/console bundle," write Pachter and Woo -- but "we don’t see a meaningful threat to the Wii at these prices," they warn.
And while the Kinect may not be a huge threat to Nintendo just yet, the analysts project that its status as a new technology should help boost Microsoft as well as the industry at large.
"Although 2010 has been a difficult year for the video game industry so far, consumers have shown a willingness to spend money on unique content," they write. "If we’re right about unit sales, Microsoft should be responsible for $450 million in retail sales during the holiday quarter, driving year-over-year comparisons up around 5 percent for the holiday quarter, and around 2 percent for the full year."
"Because that bundle is only $100 more than the price of the same Xbox 360 model sans Kinect, Pachter and Woo believe the Kinect's initial $150 price point has a built-in buffer that will allow Microsoft to cut the device's price as needed -- and the analysts think that will happen as soon as early next year."
The logic behind this argument makes my brain hurt.
The analysts are suggesting Microsoft is offering the Kinect Stand Alone Kit for 50$ more, then they would like to, cause they want to have a "buffer" that will allow them to cut the price by 33% within the first half year after launch?
A price cut, from which the analysts think it would drive sales?
Why isn't Microsoft launching the device for 100$ from the start, when all they get from the 150$ price tag, according to the analysts, is slower sales in the most important time of the year, the holiday season?
And how should MS explain a price cut of 33% just after the holiday season to the customers, that brought Kinect for 150$?
I haven't ordered one yet but I will probably be buying a Kinect either this year or early next year. I mainly want it for the 360 control interface. Most of the launch titles do not interest me except for the Your Fitness. The tech behind the Your Fitness is pretty cool. If they had someone cool like that Rez X sequel or Kinect Sonic, I would probably order it now. Am I the only one interested in getting a Kinect? Hopefully, the video chat will be compatible with 360 owners who only have the 360 web cam.
i have about 2.3 million friends who are going to buy kinect at $150... they're the same guys who bought 12 million tony hawk ride boards and made that expensive gimmick such a hit. they live in a fairytale land where pachter's predictions come true (sorry borderlands - - you were not a successful new ip in this magical land).
wedbush technical gurus estimate that the kinect hardware is around $50 to fabricate. add the advertising, e3 elephants, celebrity appearances, paying for vista r&d... and microsoft is only making around $1 or $2.50 per kinectical camera.
likelier it will sell modest numbers in the north american market, with minor action in europe and total rejection in the asian market. stores will begin discounting units in early 2011 when stock needs a push to leave the floor. and mid to late 2011 there will be some new titles that start some excitement for kinectical where we see some really good wii-cloneware arriving. maybe that cool carnival game perhaps.
This is comedy gold. Four million Xbox 360 owners are going to buy Kinect, despite all evidence to the contrary, despite the hostility and backlash seen on websites and forums like NeoGAF. The hardcore gamers are NOT flocking to the Kinect. Their response so far has been critical, if not hostile, ever since Microsoft's disastrous E3 spectacle. They view Kinect as an accessory aimed solely at "casual" gamers, not for them.
Consider the following event just this month (courtesy of Gamerzine):
--------
Microsoft's Director of Policy and Enforcement for Xbox LIVE Stephen Toulouse has hit out at the hardcore gamers who have raised concerns about Microsoft's upcoming motion control interface Kinect, saying that they have "kinda been wrong a lot for the past ten years".
"I have one thing to say to the hardcore gamer who says Kinect has nothing for them," said Toulouse while discussing concerns about Kinect on Major Nelson's latest podcast. "Those games will have achievements, so don't tell me you're not going to play at least some of them, you hardcore gamers out there. I know you will."
But Toulouse later suggested that the hardcore audience, who largely expect Kinect to underperform and under deliver when it launches in November, had been "wrong a lot" about market trends and successes "for the past ten years",
"Let's go back and look at the track record of the hardcore gamer," he continued.
"Shipping a console with an Ethernet port? Oh, it'll never succeed. Paying for multiplayer? Oh no, that's not good. I don't like avatars; I won't buy anything that goes to my avatar. The Wii... I mean no offence hardcore gamers, you've kinda been wrong a lot for the past ten years.
--------
Microsoft also addressed their hardcore backlash in an interview in GameIndustry.biz:
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I’ll say again, at the risk of sounding like a cracked record, that [Kinect initially being “casual”] doesn’t in any way, shape or form represent us stepping away from the core – which is why, during the press conference at E3 for example, we spent a good solid chunk of time around Halo Reach, Gears of War and Fable. And there will be more coming from us, and our third party partners.
--------
These are not the actions of a company that is confident of selling 2-4 million Kinects to its core base. This is a company engaged in spin and damage control. And this is perfectly in keeping with Disruption literature. A company must secure its core base and earn the right to innovate. If this does not happen, there is a risk of a backlash that erupts into a fire...exactly what we are seeing right now.
There is no empirical evidence for Pachter to make such claims. Sadly, he has a long history of making similar predictions that fail to pass. There are many examples of this, as the oracle Google will reveal. I'll close with my personal favorite prophecy, one that Pachter insisted upon for many months without evidence:
"A Wii HD would really position Nintendo well, which is why I'm absolutely convinced there is a Wii HD coming,”
Microsoft isn't "too big to fail", they're really good at making huge mistakes (Bob, Windows 'me', and the latest flop Kin). But they've also made billions dominating markets. I'm still not sure which way Kinect will go.
People who identify themselves as the "core market" are making a lot of negative noise on hard core forums, but pre-sales appear to be high.
My prediction is that it will sell a decent amount for Christmas, and sales will start nosediving till its price is dropped and something for the hardcore comes out, but 2 to 4 million, i don't think that's going to happen. The Kinect may be a success in the long run, but not until some seriously good stuff comes out. The Wii-itis infected software it currently has isn't too compelling.
As far as hardcore gamers being wrong, that quote regarding the Ethernet port, I don't remember that being a major worry among hardcore gamers during the Xbox days. Maybe PS2 fanboys though.
If Pachter says 2 to 4 million, be worried MS, his predictions seem to go the other way most of the time.
Plus, the Kin was a failure, and now we have KINect, there's some bad mojo there.
I don't want it to fail, i want it be compelling so i want one. I had planned on getting one this Christmas until E3, now I'm going to forgo it. C'mon MS, I need a reason to be excited about Kinect, and i don't have one so far.
It is being released at $150 dollars as an anchor point and as a way to recoup the costs of R&D. It is probably still being sold at a loss at $150 but we will see. When the price drops, they hope consumers will think wow, it dropped 50 bucks, time to get in!
In the end though, software drives hardware sales. I have no faith in any of Microsoft's first or third parties on the Kinect to produce anything that can drive adoption of Kinect. And given the fact that Kinect eats up at least 10% of system's CPU cycles and probably that much in resources, it's lack of any backwards compatibility with games will be a huge killer.
I see Kinect as the latest version of the Sega CD. As an optional peripheral it has to overcome the vicious cycle of "Why should I buy it when there aren't any good games" and "Why develop for Kinect when noone has it". That kind of thing can be overcome but I don't see any indication in the launch titles or anything upcoming that would drive the adoption needed to turn the cycle around into "I have to get Kinect- all the best games require it".
Ultimately the success of kinect (if it is to have any) is going to be driven by a few top tier games that use it innovatively. Probably in a way that the Wii controllers/PS3 move type controls can't do. But I don't really what kind of game other than the fitness genre is going to be better with Kinect than with a PS3 Move/Wii want. Yes, you can probably build decent games in the same genres as is already possible with Wii such as Ball Sports, Boxing, Sword Swinging, etc, but why is Kinect going to be *better* that what is out there already and drive me to it instead of to the Wii version.
That isn't a rhetorical question for me - I personally have 3 xbox 360s and one wii already and have no purchase intention for the Kinect at all at this moment - I don't need me-too version of Wii sports, I have that already.
"The analysts are suggesting Microsoft is offering the Kinect Stand Alone Kit for 50$ more, then they would like to, cause they want to have a "buffer" that will allow them to cut the price by 33% within the first half year after launch? "
Nope.
They suggested nothing of the kind.
"A price cut, from which the analysts think it would drive sales? "
Price cuts always increase video game sales, but then that is no reason to sell any device for just $10 at launch for example.
"Why isn't Microsoft launching the device for 100$ from the start, when all they get from the 150$ price tag, according to the analysts, is slower sales in the most important time of the year, the holiday season? "
Because they want to maximise profits during the biggest sales period of the year?
Kinect will sell millions in November and December anyways, so why not make the most profits one can?
"And how should MS explain a price cut of 33% just after the holiday season to the customers, that brought Kinect for 150$? "
I don't know if Microsoft will cut prices right after Christmas.
"Because that bundle is only $100 more than the price of the same Xbox 360 model sans Kinect, Pachter and Woo believe the Kinect's initial $150 price point has a built-in buffer that will allow Microsoft to cut the device's price as needed -- and the analysts think that will happen as soon as early next year."
New game systems see a price cut mere months after its release for one reason only: they fail spectacularly. There is no reason to believe a price cut in early 2011 is imminent. If anything, such a move would backfire against early adopters. How would you feel if you bought a Kinect on day one, and the price dropped six months later? If Pachter has any evidence for this claim, let him present it.
Pachter's predictions in this article are bizarre. This doesn't appear to be sound "analysis" at all, certainly not to my eyes and ears. This appears to be an effort to influence and manipulate the gaming news cycle. The question is why. Why should it matter to an impartial financial analyst which way the business market evolves? Why should it matter who wins and who loses? Why is such an "analyst" given endless free press after so many predictions turn out to be false?
As for Microsoft, I don't have too much faith in them at this point. If any major player is going to exit the hardware video games business, it's going to be them. The investors want to scuttle Microsoft's consumer entertainment division, after losing money on not only Xbox, but all the other ventures as well. Windows and Office remain the company's golden goose, but the company's stock performance tells you all you need to know.
Kinect is going to fail. Despite years of development, the hardware still needs work, and the games more closely resemble the third-party "casual" shovelware that failed on the Wii. Meanwhile, while Microsoft has struggled for dominace in the living room, they've lost the mobile market to Apple and Google. Every dollar spent on Xbox is one dollar lost on mobile. Investors know this, and unless this situation radically changes, there's going to be a shakedown.
Christian Keichel said: "The logic behind this argument makes my brain hurt."
One reason could be that MS views the initial price as a fair market price, especially when compared to the other motion controller products. If things don't go too well, they can reduce the price.
It is effectively the same strategy adopted for the 360, where the console had fewer price drops (and less of a drop in amount) compared to the PS3 console that went from $599 to $299 in the span of 3 years. It's a "safe" pricing strategy that ensures profitability at the expense of sales and product adoption.
I would agree that it makes more sense to provide more value to the consumer, first and foremost, rather than ensuring and stretching profitability. And yes, it will be hard to explain a 33% price drop to consumers. To me, such a price drop would tell me that the product is a failure to a degree, as it wasn't worth the initial asking price.
DanielThomas MacInnes said: "despite the hostility and backlash seen on websites and forums like NeoGAF."
Keep in mind that NeoGAF has been wrong about many things, if not every major trend, in this industry. The Wii is going to flop, 3rd parties would be stupid to make their PS3 games multiconsole, ...the list goes on and on. The general consensus on the forum has rarely been right, especially when it comes to industry trends. I have nothing against people going there to chat about their favourite games, and there are some very cool hardcore gamers on there, but if you are looking for insight on the software entertainment industry you are looking in the wrong place. There is a "system war" element to it that doesn't look at the larger industry issues with any objectivity.
I see what you are trying to get at, but do consider that 5-10% is a small number that doesn't have to reflect the "hardcore" (ie. traditional gamer). I know people who own a 360 just for Guitar Hero. Secondly, I also know people who are early adopters for most products because they are loyal to the console (ie. I know someone who bought an Eyetoy not for the Eyetoy games but for what he thought would be support for the product in other 3rd party titles). So rather than thinking in terms of "hardcore", think along the lines of "loyalist" and "expanded market gamers who already have a 360".
An adoption rate of 5-10% is next to nothing in regards to the big picture. If the goal is to chase the Wii, it's going to have to move as many 360 units as possible this Fall.
They have a compelling product, from my perspective the general populace is intrigued by the idea, but the software and execution (response time, accuracy) are big question marks that can ruin any momentum it may have as a product.
"I see Kinect as the latest version of the Sega CD. As an optional peripheral it has to overcome the vicious cycle of "Why should I buy it when there aren't any good games" and "Why develop for Kinect when noone has it" "
I can understand the comparsion, but I would go one step further. I think Kinect is the equivalent of the Mattel Intellivision system. It had a technological advanced concept (16 Bit CPU, when anybody else had 8 Bit CPUs), but it ran with a so low clockspeed, that no developer could take advantage of the power. The result were games, that looked not nearly as good as games on the technological inferior Atari VCS.
This reminds me of Kinect, which has a revolutionary new way of motion controls, but, from what I heard and seen from the e3, isn't powerful enough to recognize something else then very clear and strong gestures.
Move on the other side seems to me like another aspect of the Intellivision, the controllers, which had a directional disc instead of a stick, and allowed movements in 16 directions instead of 8. More precision sounded great, but in the end, it was completely useless.
I'm looking forward to it as well; I probably won't buy one right away and will be one of the people that waits for a price drop, but I still think it looks like it will be fun.
Hardcore gamers also said the Wii would flop; I think they were off just a bit on that one. I don't know if Kinect will be a success or not, but I wouldn't base my assumptions on the Kotaku comment boards.
2-4 million ain't really that big a deal anyway. I can see it happening by March, and I'm highly critical of the whole fisaco anyway. Who cares about 2-4 million. The real crunch is if it can push through to 10+ million and beyond by the end of 2011 (ala WM+ or Wiifit), because if it can't then it'll be dead in the water as a platform (how could 30-40 games at $10-$20 million budgets possibly be supported and sustained on anything less than a 10 million base with a 'casual gamer' tie-ratio). And if Kinect dies as a platform, what does that do MS's 10-year plan for 360?
I have to give Microsoft a lot of credit for developing this technology Primesense. It is a huge risk but it could reap huge rewards in the future for Microsoft. Even if it doesn't catch on with gaming community, it could be a huge boon in countless computer applications. Microsoft is already developing Kinect for the XBox III so this version may be the stumble and fall in its first baby steps. I think from a purely technology view that this is truly futuristic technology. Does anyone really think that we will still be using a keyboard and mouse a hundred years from now?
"Does anyone really think that we will still be using a keyboard and mouse a hundred years from now? "
Yes I do, for written communication, there's nothing in sight to replace a keyboard. Apart from that, a hundred years from now? I hope we will be much further, then waving in front of a webcam to get a response from the machine.
I don't see a XBox III in the next years, and even if it arrives, Sony didn't include eyeToy into the main configuration of the PS3 (which I think was a failure), so I don't know, if Microsoft will continue with the Kinect system, when they ever make a successor for the 360.
"Microsoft says Gears of War, Halo, and Fable fans can rest assured the company isn't abandoning them for the Wii demographic with its initially casual-focused Kinect.
"But for the rest of 2010, don't look for more than "broad" appeal Kinect games, according to Microsoft EMEA vice president Chris Lewis.
" 'Certainly over the launch phase and this Christmas in particular I think you'll see very much pure Kinect for 360 experiences that will appeal to the broad young/older/female/family audiences I described earlier,' said Lewis, speaking to Gameindustry.biz.
"How long do GearsofWarHaloFable gamers have to wait then?
"18 months, says Lewis, during which time 'more of these hybrid experiences...where you can complement what might ostensibly be a controller-based experience with gestures, voice and physical movement' will probably make an appearance."
"I don't see a XBox III in the next years, and even if it arrives, Sony didn't include eyeToy into the main configuration of the PS3 (which I think was a failure), so I don't know, if Microsoft will continue with the Kinect system, when they ever make a successor for the 360."
I read online that Microsoft said that Kinects will be a part of their next Xbox system. They are working the technology into their next console. I will have to find the link and post it.
I'm glad you linked in that article, Daniel. This is what a lot of people will be waiting for. How will MS and 3rd parties integrate and innovate with Kinect?
Personally I think Kinect has some really cool possibilities as a controller augment for hardcore games, not necessarily as the standalone controller. This could make or break the peripheral.
I do believe MS is taking the long term view here, releasing the Kinect this gen as their test and prototype platform while they continue to improve the tech for inclusion with the next box.
"Four million Xbox 360 owners are going to buy Kinect, despite all evidence to the contrary, despite the hostility and backlash seen on websites and forums like NeoGAF"
I don't kinow how long you have been on Neogaf for, but back when the Wii (it was called the Revolution at the time), was first introduced at TGS in Tokyo, there was a thread on Negoaf about it.
The consensus?
Most of Neogaf was of the firm belief that the Wiimote was going to be a total failure.
There have been too many occasions where Neogaf thought some game was going to bomb only for that game to blow the doors off the hinges, for anyone to swear by what Neogaf says.
In addition, Kinect shot straight to # 1 on Amazon UK when it became available for pre-orders {http://www.amazon.co.uk/gp/bestsellers/videogames/ref=pd_ts_pg_1?ie=UTF8&pg=1}, after also shooting to # 1 on Amazon US when it was available for pre-orders here in the US.
No game/accesory/console that has sold at # 1 on Amazon in the US or the UK months before launch, hasn't gone on to do very well in sales when it was launched.
"I'll close with my personal favorite prophecy, one that Pachter insisted upon for many months without evidence:
"A Wii HD would really position Nintendo well, which is why I'm absolutely convinced there is a Wii HD coming,”
Of course there will be a Wii HD, it may just be called Wii 2 that's all.
There is no question the Nintendo will move the Wii to the HD market sooner rather than later.
"We think that the Kinect bundle with the new [Xbox 360] SKU has a significant value advantage over Move plus the PS3, coming in at $299 compared to $479 for the Move/console bundle," write Pachter and Woo -- but "we don’t see a meaningful threat to the Wii at these prices," they warn."
Well when you have two players, the Kinect Arcade bundle will still cost ya the same $300, while the Wii with 2 players will costs ya from $239 to $359 with all the extra Wiimotes etc. Kinect works out as a better deal as you add in more users. Plus the 360 is HD (and has better physics and AI), while the Wii is not.
To be fair, Daniel, this is VERY vague speculation.
That said, I would actually be fine with a new, more creative, more forward thinking CEO at the helm of MS. They have some great products and the capital to really drive some new tech. MS could be an exciting company, but they really need to push the R&D to innovate in the ease and functionality space, plus get REALLY price competitive for given feature sets and garner some goodwill by using their profits to subsidize some freebies or break-evens for consumers.
Plenty of smart people at MS, plenty of potential there, just needs creative direction.
"I wouldn't put too much stock into Amazon's rankings. Just a few years ago, HD DVD players were right on top, and we all saw how that went. "
Why don't we just look back at just last month, when, the new XBOX 360 S outsold the Wii/PS3 on Amazon and the 360 ended up outselling the PS3/Wii in NPD?
Just last week, the 360 VASTLY outsold the PS3/Wii last week in the UK, after outselling both consoles on Amazon.
Or why don't we look at Halo 3 and MW2 hitting # 1 on Amazon, long before release (just like Kinect has done), and both games going on to register huge sales?
In addition, the 360 HD DVD didn't hit # 1 on Amazon in pre-orders 6 months before launch, like Kinect has done.
" I'm just saying that high rankings on Amazon are not necessarily indicative of the entire market. "
True, but I am yet to see any game/peripheral that has hit # 1 on Amazon, a full 5, 4, 3 or even 2 months before launch, and stayed at # 1 for some days (like Kinect did), then went on to bomb when it was launched.
Kinect will register pretty high sales in November.
Just tried to find out if the "360 VASTLY outsold the PS3/Wii last week in the UK", I thought it would be wise to follow your link, but imagine what? I didn't found any sales numbers for the PS3 or the Wii in this link. In fact, I didn't even found actual numbers of the weekly sales for the 360 in the article.
Then I tried to find the numbers on the GFK chart track website, you won't guess what I found there, when I looked for hardware sales numbers, "Data is available to subscribers every Sunday afternoon on the previous week's UK sales (via email). " So, I guess you are a subscriber of the GFK Charttrack numbers. Would you mind to share the numbers with us?
And by the way, the 360S was released on a friday, the sales numbers for the week are released on sunday, am I right, that we are talking here about 2 days of sales?
Where do those pre-order sales come from? Do you honestly think the expanded market is behind those numbers? Pre-order sales ALWAYS come from the core audience. The expanded market is not going to buy this thing until they actually get a chance to try it, and even then they will be skeptical.
Pre-order sales give no indication that Kinect will be a success with the expanded market, especially when those are vauge rankings from an online store. If Kinect can not appeal to the expanded market, they will fail. The whole point of Kinect is to expand their market so they can sell more systems and extend their console's lifecycle.
If there is a small level of backlash coming from the core, I see it as a huge threat for Microsoft. If they fail at attracting the expanded audience and lose their own core audience in the process, they will be doomed.
"Just tried to find out if the "360 VASTLY outsold the PS3/Wii last week in the UK", I thought it would be wise to follow your link, but imagine what? I didn't found any sales numbers for the PS3 or the Wii in this link. In fact, I didn't even found actual numbers of the weekly sales for the 360 in the article."
Google is your friend.
Charttrack:
"19/Jul/2010
Microsoft’s new and improved, slimmer XBox 360 console, the XBox 360 250GB (or XBox 360 S) achieves the biggest launch in the UK for a “revised” home console, surpassing the launches of both PS2 Slim and PS3 Slim and recording over two days around the same as the original Xbox 360's launch sales total back in week 48 2005"
http://www.chart-track.co.uk/?i=896&s=1111
So we know that the 360 S sold as much the original XBOX 360 did when it was launched way back in 2005, no?
So how many units did the XBOX 360 sell when it was launched in 2005 in the UK?
Easy:
"In comparison, Microsoft's Xbox 360 sold 70,000 units during its first week of availability in the UK."
http://hdtvorg.co.uk/news/articles/2007040501.htm
That means the 360 S sold 70,000 last week, no?
We haven't even added in the sales of the 360 Arcade and 360 Elite, which had price cuts last week as well
So how do we know that the 360 vastly outsold the Wii/PS3?
Easy.
Chris Lewis, Microsoft's Xbox EMEA boss:
"Chris Lewis, UK Sales Of Xbox 360 Consoles Surge By 1000 Percent
"This past weekend we shipped our 250GB new slimmer console that Don [Mattrick] showed at E3 and we've had a fabulous sales weekend. The UK went up 1000 percent week-over-week with an 84 per cent market share."
So we now know that the XBOX 360 sold a massive 84% of all consoles sold last week, meaning the 360 vastly outsold the PS3 and the Wii, no?
"And by the way, the 360S was released on a friday, the sales numbers for the week are released on sunday, am I right, that we are talking here about 2 days of sales? "
Article gives no numbers about 360 hardware unit sales.
In the end, you get your numbers from an article on the website hdtvorg.co.uk from 2007, that has no sources and not even a named author, who is responsible for the text.
"Just last week, the 360 VASTLY outsold the PS3/Wii last week in the UK, after outselling both consoles on Amazon."
This was what you said, all I asked, can you give us the UK hardware sales numbers of the last week for the 360, Wii and PS3, so that I can see, what you meant by saying "VASTLY outsold"?
" the end, you get your numbers from an article on the website hdtvorg.co.uk from 2007, that has no sources and not even a named author, who is responsible for the text."
Chortle!
You just crack me up. Having been badly beaten, you are now reduced to waging a desperate rearguard action. That really makes me laugh.
The 360's launch week sales in the UK are not exactly a secret are they?
You can find them XBOX 360 UK launch week sales figures all over the internet, including the highly reputable MCVUK..unless of course you want to claim that MCVUK is is also publishing fake figures as well?
MCVUK:
"Tuesday, 6th December 2005 at 9:30 am
Record-breaking 360 off to 70k flyer
Xbox 360 has become the fastest-selling home console in UK chart history, Microsoft’s next-gen system beating previous record-holder GameCube by shifting an estimated 70,000 units in its opening weekend"
What more ridiculous nonsense ya got to sprew out?
"Just last week, the 360 VASTLY outsold the PS3/Wii last week in the UK, after outselling both consoles on Amazon."
This was what you said, all I asked, can you give us the UK hardware sales numbers of the last week for the 360, Wii and PS3, so that I can see, what you meant by saying "VASTLY outsold"? "
I have. You just can't read that's all (or insanely refuse to accept reality).
The 360 S alone sold 70,000 units last week in just 2 days. That's even before we add in the sales of the 360 Aracde and the 360 Elite which were reduced in prices as well.
Plus Chris Lewis, Microsoft's Xbox EMEA boss made it clear that the 360 accounted for a massive 84% of all consoles sold last week in the UK (I kindly provided you a link for that too). That means the Wii and PS3 combined accounted for less than 16% of consoles sold in the UK last week. At the very least, the 360 sold more than FOUR TIMES as many units as the PS3 and Wii combined.
Thanks for providing the links, that was all I asked for, the mcvuk link gave a source, something, the hdtvorg link didn't. Congratulations to MS for great sales in the opening weekend of the 360S, but in the end, they increased their console sales by 1000% week-over-week, which means, the sales for the 360 were almost non-existing in the week before. So they VASTLY outsold the PS3 and Wii in this week, but it also means, they were VASTLY outsold in the week before.
This isn't surprising, cause MS cut the price of the console at the 360S launch, but it shouldn't go unmentioned, cause it puts things into perspective.
The logic behind this argument makes my brain hurt.
The analysts are suggesting Microsoft is offering the Kinect Stand Alone Kit for 50$ more, then they would like to, cause they want to have a "buffer" that will allow them to cut the price by 33% within the first half year after launch?
A price cut, from which the analysts think it would drive sales?
Why isn't Microsoft launching the device for 100$ from the start, when all they get from the 150$ price tag, according to the analysts, is slower sales in the most important time of the year, the holiday season?
And how should MS explain a price cut of 33% just after the holiday season to the customers, that brought Kinect for 150$?
wedbush technical gurus estimate that the kinect hardware is around $50 to fabricate. add the advertising, e3 elephants, celebrity appearances, paying for vista r&d... and microsoft is only making around $1 or $2.50 per kinectical camera.
likelier it will sell modest numbers in the north american market, with minor action in europe and total rejection in the asian market. stores will begin discounting units in early 2011 when stock needs a push to leave the floor. and mid to late 2011 there will be some new titles that start some excitement for kinectical where we see some really good wii-cloneware arriving. maybe that cool carnival game perhaps.
This is comedy gold. Four million Xbox 360 owners are going to buy Kinect, despite all evidence to the contrary, despite the hostility and backlash seen on websites and forums like NeoGAF. The hardcore gamers are NOT flocking to the Kinect. Their response so far has been critical, if not hostile, ever since Microsoft's disastrous E3 spectacle. They view Kinect as an accessory aimed solely at "casual" gamers, not for them.
Consider the following event just this month (courtesy of Gamerzine):
--------
Microsoft's Director of Policy and Enforcement for Xbox LIVE Stephen Toulouse has hit out at the hardcore gamers who have raised concerns about Microsoft's upcoming motion control interface Kinect, saying that they have "kinda been wrong a lot for the past ten years".
"I have one thing to say to the hardcore gamer who says Kinect has nothing for them," said Toulouse while discussing concerns about Kinect on Major Nelson's latest podcast. "Those games will have achievements, so don't tell me you're not going to play at least some of them, you hardcore gamers out there. I know you will."
But Toulouse later suggested that the hardcore audience, who largely expect Kinect to underperform and under deliver when it launches in November, had been "wrong a lot" about market trends and successes "for the past ten years",
"Let's go back and look at the track record of the hardcore gamer," he continued.
"Shipping a console with an Ethernet port? Oh, it'll never succeed. Paying for multiplayer? Oh no, that's not good. I don't like avatars; I won't buy anything that goes to my avatar. The Wii... I mean no offence hardcore gamers, you've kinda been wrong a lot for the past ten years.
--------
Microsoft also addressed their hardcore backlash in an interview in GameIndustry.biz:
--------
I’ll say again, at the risk of sounding like a cracked record, that [Kinect initially being “casual”] doesn’t in any way, shape or form represent us stepping away from the core – which is why, during the press conference at E3 for example, we spent a good solid chunk of time around Halo Reach, Gears of War and Fable. And there will be more coming from us, and our third party partners.
--------
These are not the actions of a company that is confident of selling 2-4 million Kinects to its core base. This is a company engaged in spin and damage control. And this is perfectly in keeping with Disruption literature. A company must secure its core base and earn the right to innovate. If this does not happen, there is a risk of a backlash that erupts into a fire...exactly what we are seeing right now.
There is no empirical evidence for Pachter to make such claims. Sadly, he has a long history of making similar predictions that fail to pass. There are many examples of this, as the oracle Google will reveal. I'll close with my personal favorite prophecy, one that Pachter insisted upon for many months without evidence:
"A Wii HD would really position Nintendo well, which is why I'm absolutely convinced there is a Wii HD coming,”
This statement bothers me so much... When did hardcore = chaser of useless points metric. Oh, well.
Back on topic, Kinect - good luck. You'll need it. 4 million install base isn't even worth developing for this late in the cycle.
People who identify themselves as the "core market" are making a lot of negative noise on hard core forums, but pre-sales appear to be high.
As far as hardcore gamers being wrong, that quote regarding the Ethernet port, I don't remember that being a major worry among hardcore gamers during the Xbox days. Maybe PS2 fanboys though.
If Pachter says 2 to 4 million, be worried MS, his predictions seem to go the other way most of the time.
Plus, the Kin was a failure, and now we have KINect, there's some bad mojo there.
I don't want it to fail, i want it be compelling so i want one. I had planned on getting one this Christmas until E3, now I'm going to forgo it. C'mon MS, I need a reason to be excited about Kinect, and i don't have one so far.
In the end though, software drives hardware sales. I have no faith in any of Microsoft's first or third parties on the Kinect to produce anything that can drive adoption of Kinect. And given the fact that Kinect eats up at least 10% of system's CPU cycles and probably that much in resources, it's lack of any backwards compatibility with games will be a huge killer.
Ultimately the success of kinect (if it is to have any) is going to be driven by a few top tier games that use it innovatively. Probably in a way that the Wii controllers/PS3 move type controls can't do. But I don't really what kind of game other than the fitness genre is going to be better with Kinect than with a PS3 Move/Wii want. Yes, you can probably build decent games in the same genres as is already possible with Wii such as Ball Sports, Boxing, Sword Swinging, etc, but why is Kinect going to be *better* that what is out there already and drive me to it instead of to the Wii version.
That isn't a rhetorical question for me - I personally have 3 xbox 360s and one wii already and have no purchase intention for the Kinect at all at this moment - I don't need me-too version of Wii sports, I have that already.
"The analysts are suggesting Microsoft is offering the Kinect Stand Alone Kit for 50$ more, then they would like to, cause they want to have a "buffer" that will allow them to cut the price by 33% within the first half year after launch? "
Nope.
They suggested nothing of the kind.
"A price cut, from which the analysts think it would drive sales? "
Price cuts always increase video game sales, but then that is no reason to sell any device for just $10 at launch for example.
"Why isn't Microsoft launching the device for 100$ from the start, when all they get from the 150$ price tag, according to the analysts, is slower sales in the most important time of the year, the holiday season? "
Because they want to maximise profits during the biggest sales period of the year?
Kinect will sell millions in November and December anyways, so why not make the most profits one can?
"And how should MS explain a price cut of 33% just after the holiday season to the customers, that brought Kinect for 150$? "
I don't know if Microsoft will cut prices right after Christmas.
They probably will cut prices during 2011 though.
"Why develop for Kinect when noone has it".
Kinect already has more third party support than the Wiimote ever had when the Wii was launched.
"But I don't really what kind of game other than the fitness genre is going to be better with Kinect than with a PS3 Move/Wii want"
Dancing games will be much better on Kinect than on the Wii/PS3 Move.
Plus totally new genere games like "Kate and Mile "simply can't be done on the Wii or the Move.
New game systems see a price cut mere months after its release for one reason only: they fail spectacularly. There is no reason to believe a price cut in early 2011 is imminent. If anything, such a move would backfire against early adopters. How would you feel if you bought a Kinect on day one, and the price dropped six months later? If Pachter has any evidence for this claim, let him present it.
Pachter's predictions in this article are bizarre. This doesn't appear to be sound "analysis" at all, certainly not to my eyes and ears. This appears to be an effort to influence and manipulate the gaming news cycle. The question is why. Why should it matter to an impartial financial analyst which way the business market evolves? Why should it matter who wins and who loses? Why is such an "analyst" given endless free press after so many predictions turn out to be false?
As for Microsoft, I don't have too much faith in them at this point. If any major player is going to exit the hardware video games business, it's going to be them. The investors want to scuttle Microsoft's consumer entertainment division, after losing money on not only Xbox, but all the other ventures as well. Windows and Office remain the company's golden goose, but the company's stock performance tells you all you need to know.
Kinect is going to fail. Despite years of development, the hardware still needs work, and the games more closely resemble the third-party "casual" shovelware that failed on the Wii. Meanwhile, while Microsoft has struggled for dominace in the living room, they've lost the mobile market to Apple and Google. Every dollar spent on Xbox is one dollar lost on mobile. Investors know this, and unless this situation radically changes, there's going to be a shakedown.
One reason could be that MS views the initial price as a fair market price, especially when compared to the other motion controller products. If things don't go too well, they can reduce the price.
It is effectively the same strategy adopted for the 360, where the console had fewer price drops (and less of a drop in amount) compared to the PS3 console that went from $599 to $299 in the span of 3 years. It's a "safe" pricing strategy that ensures profitability at the expense of sales and product adoption.
I would agree that it makes more sense to provide more value to the consumer, first and foremost, rather than ensuring and stretching profitability. And yes, it will be hard to explain a 33% price drop to consumers. To me, such a price drop would tell me that the product is a failure to a degree, as it wasn't worth the initial asking price.
DanielThomas MacInnes said: "despite the hostility and backlash seen on websites and forums like NeoGAF."
Keep in mind that NeoGAF has been wrong about many things, if not every major trend, in this industry. The Wii is going to flop, 3rd parties would be stupid to make their PS3 games multiconsole, ...the list goes on and on. The general consensus on the forum has rarely been right, especially when it comes to industry trends. I have nothing against people going there to chat about their favourite games, and there are some very cool hardcore gamers on there, but if you are looking for insight on the software entertainment industry you are looking in the wrong place. There is a "system war" element to it that doesn't look at the larger industry issues with any objectivity.
I see what you are trying to get at, but do consider that 5-10% is a small number that doesn't have to reflect the "hardcore" (ie. traditional gamer). I know people who own a 360 just for Guitar Hero. Secondly, I also know people who are early adopters for most products because they are loyal to the console (ie. I know someone who bought an Eyetoy not for the Eyetoy games but for what he thought would be support for the product in other 3rd party titles). So rather than thinking in terms of "hardcore", think along the lines of "loyalist" and "expanded market gamers who already have a 360".
An adoption rate of 5-10% is next to nothing in regards to the big picture. If the goal is to chase the Wii, it's going to have to move as many 360 units as possible this Fall.
They have a compelling product, from my perspective the general populace is intrigued by the idea, but the software and execution (response time, accuracy) are big question marks that can ruin any momentum it may have as a product.
"I see Kinect as the latest version of the Sega CD. As an optional peripheral it has to overcome the vicious cycle of "Why should I buy it when there aren't any good games" and "Why develop for Kinect when noone has it" "
I can understand the comparsion, but I would go one step further. I think Kinect is the equivalent of the Mattel Intellivision system. It had a technological advanced concept (16 Bit CPU, when anybody else had 8 Bit CPUs), but it ran with a so low clockspeed, that no developer could take advantage of the power. The result were games, that looked not nearly as good as games on the technological inferior Atari VCS.
This reminds me of Kinect, which has a revolutionary new way of motion controls, but, from what I heard and seen from the e3, isn't powerful enough to recognize something else then very clear and strong gestures.
Move on the other side seems to me like another aspect of the Intellivision, the controllers, which had a directional disc instead of a stick, and allowed movements in 16 directions instead of 8. More precision sounded great, but in the end, it was completely useless.
I'm looking forward to it as well; I probably won't buy one right away and will be one of the people that waits for a price drop, but I still think it looks like it will be fun.
Hardcore gamers also said the Wii would flop; I think they were off just a bit on that one. I don't know if Kinect will be a success or not, but I wouldn't base my assumptions on the Kotaku comment boards.
"Does anyone really think that we will still be using a keyboard and mouse a hundred years from now? "
Yes I do, for written communication, there's nothing in sight to replace a keyboard. Apart from that, a hundred years from now? I hope we will be much further, then waving in front of a webcam to get a response from the machine.
I don't see a XBox III in the next years, and even if it arrives, Sony didn't include eyeToy into the main configuration of the PS3 (which I think was a failure), so I don't know, if Microsoft will continue with the Kinect system, when they ever make a successor for the 360.
"Microsoft says Gears of War, Halo, and Fable fans can rest assured the company isn't abandoning them for the Wii demographic with its initially casual-focused Kinect.
"But for the rest of 2010, don't look for more than "broad" appeal Kinect games, according to Microsoft EMEA vice president Chris Lewis.
" 'Certainly over the launch phase and this Christmas in particular I think you'll see very much pure Kinect for 360 experiences that will appeal to the broad young/older/female/family audiences I described earlier,' said Lewis, speaking to Gameindustry.biz.
"How long do GearsofWarHaloFable gamers have to wait then?
"18 months, says Lewis, during which time 'more of these hybrid experiences...where you can complement what might ostensibly be a controller-based experience with gestures, voice and physical movement' will probably make an appearance."
"I don't see a XBox III in the next years, and even if it arrives, Sony didn't include eyeToy into the main configuration of the PS3 (which I think was a failure), so I don't know, if Microsoft will continue with the Kinect system, when they ever make a successor for the 360."
I read online that Microsoft said that Kinects will be a part of their next Xbox system. They are working the technology into their next console. I will have to find the link and post it.
Personally I think Kinect has some really cool possibilities as a controller augment for hardcore games, not necessarily as the standalone controller. This could make or break the peripheral.
I do believe MS is taking the long term view here, releasing the Kinect this gen as their test and prototype platform while they continue to improve the tech for inclusion with the next box.
"Four million Xbox 360 owners are going to buy Kinect, despite all evidence to the contrary, despite the hostility and backlash seen on websites and forums like NeoGAF"
I don't kinow how long you have been on Neogaf for, but back when the Wii (it was called the Revolution at the time), was first introduced at TGS in Tokyo, there was a thread on Negoaf about it.
The consensus?
Most of Neogaf was of the firm belief that the Wiimote was going to be a total failure.
There have been too many occasions where Neogaf thought some game was going to bomb only for that game to blow the doors off the hinges, for anyone to swear by what Neogaf says.
In addition, Kinect shot straight to # 1 on Amazon UK when it became available for pre-orders {http://www.amazon.co.uk/gp/bestsellers/videogames/ref=pd_ts_pg_1?ie=UTF8&pg=1}, after also shooting to # 1 on Amazon US when it was available for pre-orders here in the US.
No game/accesory/console that has sold at # 1 on Amazon in the US or the UK months before launch, hasn't gone on to do very well in sales when it was launched.
"I'll close with my personal favorite prophecy, one that Pachter insisted upon for many months without evidence:
"A Wii HD would really position Nintendo well, which is why I'm absolutely convinced there is a Wii HD coming,”
Of course there will be a Wii HD, it may just be called Wii 2 that's all.
There is no question the Nintendo will move the Wii to the HD market sooner rather than later.
Well when you have two players, the Kinect Arcade bundle will still cost ya the same $300, while the Wii with 2 players will costs ya from $239 to $359 with all the extra Wiimotes etc. Kinect works out as a better deal as you add in more users. Plus the 360 is HD (and has better physics and AI), while the Wii is not.
http://www.slashgear.com/microsofts-steve-ballmer-could-face-mutiny-in-nine-mont
hs-2295035/
This is huge. The shakedown is coming to Microsoft.
That said, I would actually be fine with a new, more creative, more forward thinking CEO at the helm of MS. They have some great products and the capital to really drive some new tech. MS could be an exciting company, but they really need to push the R&D to innovate in the ease and functionality space, plus get REALLY price competitive for given feature sets and garner some goodwill by using their profits to subsidize some freebies or break-evens for consumers.
Plenty of smart people at MS, plenty of potential there, just needs creative direction.
"I wouldn't put too much stock into Amazon's rankings. Just a few years ago, HD DVD players were right on top, and we all saw how that went. "
Why don't we just look back at just last month, when, the new XBOX 360 S outsold the Wii/PS3 on Amazon and the 360 ended up outselling the PS3/Wii in NPD?
Just last week, the 360 VASTLY outsold the PS3/Wii last week in the UK, after outselling both consoles on Amazon.
http://www.mcvuk.com/news/40048/Xbox-360-S-redesigns-records
Or why don't we look at Halo 3 and MW2 hitting # 1 on Amazon, long before release (just like Kinect has done), and both games going on to register huge sales?
In addition, the 360 HD DVD didn't hit # 1 on Amazon in pre-orders 6 months before launch, like Kinect has done.
" I'm just saying that high rankings on Amazon are not necessarily indicative of the entire market. "
True, but I am yet to see any game/peripheral that has hit # 1 on Amazon, a full 5, 4, 3 or even 2 months before launch, and stayed at # 1 for some days (like Kinect did), then went on to bomb when it was launched.
Kinect will register pretty high sales in November.
"Just last week, the 360 VASTLY outsold the PS3/Wii last week in the UK, after outselling both consoles on Amazon.
http://www.mcvuk.com/news/40048/Xbox-360-S-redesigns-records"
Just tried to find out if the "360 VASTLY outsold the PS3/Wii last week in the UK", I thought it would be wise to follow your link, but imagine what? I didn't found any sales numbers for the PS3 or the Wii in this link. In fact, I didn't even found actual numbers of the weekly sales for the 360 in the article.
Then I tried to find the numbers on the GFK chart track website, you won't guess what I found there, when I looked for hardware sales numbers, "Data is available to subscribers every Sunday afternoon on the previous week's UK sales (via email). " So, I guess you are a subscriber of the GFK Charttrack numbers. Would you mind to share the numbers with us?
And by the way, the 360S was released on a friday, the sales numbers for the week are released on sunday, am I right, that we are talking here about 2 days of sales?
Where do those pre-order sales come from? Do you honestly think the expanded market is behind those numbers? Pre-order sales ALWAYS come from the core audience. The expanded market is not going to buy this thing until they actually get a chance to try it, and even then they will be skeptical.
Pre-order sales give no indication that Kinect will be a success with the expanded market, especially when those are vauge rankings from an online store. If Kinect can not appeal to the expanded market, they will fail. The whole point of Kinect is to expand their market so they can sell more systems and extend their console's lifecycle.
If there is a small level of backlash coming from the core, I see it as a huge threat for Microsoft. If they fail at attracting the expanded audience and lose their own core audience in the process, they will be doomed.
"Just tried to find out if the "360 VASTLY outsold the PS3/Wii last week in the UK", I thought it would be wise to follow your link, but imagine what? I didn't found any sales numbers for the PS3 or the Wii in this link. In fact, I didn't even found actual numbers of the weekly sales for the 360 in the article."
Google is your friend.
Charttrack:
"19/Jul/2010
Microsoft’s new and improved, slimmer XBox 360 console, the XBox 360 250GB (or XBox 360 S) achieves the biggest launch in the UK for a “revised” home console, surpassing the launches of both PS2 Slim and PS3 Slim and recording over two days around the same as the original Xbox 360's launch sales total back in week 48 2005"
http://www.chart-track.co.uk/?i=896&s=1111
So we know that the 360 S sold as much the original XBOX 360 did when it was launched way back in 2005, no?
So how many units did the XBOX 360 sell when it was launched in 2005 in the UK?
Easy:
"In comparison, Microsoft's Xbox 360 sold 70,000 units during its first week of availability in the UK."
http://hdtvorg.co.uk/news/articles/2007040501.htm
That means the 360 S sold 70,000 last week, no?
We haven't even added in the sales of the 360 Arcade and 360 Elite, which had price cuts last week as well
So how do we know that the 360 vastly outsold the Wii/PS3?
Easy.
Chris Lewis, Microsoft's Xbox EMEA boss:
"Chris Lewis, UK Sales Of Xbox 360 Consoles Surge By 1000 Percent
"This past weekend we shipped our 250GB new slimmer console that Don [Mattrick] showed at E3 and we've had a fabulous sales weekend. The UK went up 1000 percent week-over-week with an 84 per cent market share."
Read more: http://www.itproportal.com/portal/news/article/2010/7/22/uk-sales-xbox-360-conso
les-surge-1000-percent/#ixzz0uSJ0mFkQ
So we now know that the XBOX 360 sold a massive 84% of all consoles sold last week, meaning the 360 vastly outsold the PS3 and the Wii, no?
"And by the way, the 360S was released on a friday, the sales numbers for the week are released on sunday, am I right, that we are talking here about 2 days of sales? "
Correct.
http://www.chart-track.co.uk/?i=896&s=1111
Article gives no numbers about 360 hardware unit sales.
http://hdtvorg.co.uk/news/articles/2007040501.htm
Article gives not a single source for it's numbers
http://www.itproportal.com/portal/news/article/2010/7/22/uk-sales-xbox-360-conso
les-surge-1000-percent/#ixzz0uSJ0mFkQ
Article gives no numbers about 360 hardware unit sales.
In the end, you get your numbers from an article on the website hdtvorg.co.uk from 2007, that has no sources and not even a named author, who is responsible for the text.
"Just last week, the 360 VASTLY outsold the PS3/Wii last week in the UK, after outselling both consoles on Amazon."
This was what you said, all I asked, can you give us the UK hardware sales numbers of the last week for the 360, Wii and PS3, so that I can see, what you meant by saying "VASTLY outsold"?
" the end, you get your numbers from an article on the website hdtvorg.co.uk from 2007, that has no sources and not even a named author, who is responsible for the text."
Chortle!
You just crack me up. Having been badly beaten, you are now reduced to waging a desperate rearguard action. That really makes me laugh.
The 360's launch week sales in the UK are not exactly a secret are they?
You can find them XBOX 360 UK launch week sales figures all over the internet, including the highly reputable MCVUK..unless of course you want to claim that MCVUK is is also publishing fake figures as well?
MCVUK:
"Tuesday, 6th December 2005 at 9:30 am
Record-breaking 360 off to 70k flyer
Xbox 360 has become the fastest-selling home console in UK chart history, Microsoft’s next-gen system beating previous record-holder GameCube by shifting an estimated 70,000 units in its opening weekend"
http://www.mcvuk.com/news/649/Record-breaking-360-off-to-70k-flyer
What more ridiculous nonsense ya got to sprew out?
"Just last week, the 360 VASTLY outsold the PS3/Wii last week in the UK, after outselling both consoles on Amazon."
This was what you said, all I asked, can you give us the UK hardware sales numbers of the last week for the 360, Wii and PS3, so that I can see, what you meant by saying "VASTLY outsold"? "
I have. You just can't read that's all (or insanely refuse to accept reality).
The 360 S alone sold 70,000 units last week in just 2 days. That's even before we add in the sales of the 360 Aracde and the 360 Elite which were reduced in prices as well.
Plus Chris Lewis, Microsoft's Xbox EMEA boss made it clear that the 360 accounted for a massive 84% of all consoles sold last week in the UK (I kindly provided you a link for that too). That means the Wii and PS3 combined accounted for less than 16% of consoles sold in the UK last week. At the very least, the 360 sold more than FOUR TIMES as many units as the PS3 and Wii combined.
Now THAT is VASTLY outselling the Wii and PS3.
Get it?
You may need to get help.
Thanks for providing the links, that was all I asked for, the mcvuk link gave a source, something, the hdtvorg link didn't. Congratulations to MS for great sales in the opening weekend of the 360S, but in the end, they increased their console sales by 1000% week-over-week, which means, the sales for the 360 were almost non-existing in the week before. So they VASTLY outsold the PS3 and Wii in this week, but it also means, they were VASTLY outsold in the week before.
This isn't surprising, cause MS cut the price of the console at the 360S launch, but it shouldn't go unmentioned, cause it puts things into perspective.
Guess time will tell, but my guess is Kinect will bomb, and bomb hard.