Kinect
By examining peripheral pricing over the last five years, EEDAR feels that $150 is an appropriate price for the Kinect. Previous peripherals with mass-market appeal, such as band kits, have sold millions of units worldwide even while priced north of $150. With band kits, however, consumers were tethered to only enjoying games within the music genre and developers restricted on future iterations by the install base of non-upgradeable band kits.
As a camera and motion sensor based device, the Kinect does not have those same limitations; developers will be able to optimize its software for years to come. Kinect should not be viewed as a software peripheral, as most peripherals are, but rather a hardware peripheral.
Additionally, game specific peripherals have a limited shelf-life in terms of appeal; there are only so many sessions of Guitar Hero one can enjoy before game fatigue sets in. With the Kinect, however, there is the possibility of a wide array of games across a broad range of genres, potentially giving the Kinect a much longer shelf-life than a typical peripheral.
The Kinect should not be viewed as a typical video game peripheral that is retired from one’s active playlist after 90 days, but rather a consumer enabling device that has the potential to revolutionize the way we interact with all forms of media on a daily basis.
Pricing
Given the Kinect’s mainstream target market, all games that are Kinect required are likely to be priced $49.99, including third-party titles. Additionally, Dance Central will be priced at $49.99, and given the likelihood it becomes one of Kinect’s top sellers it will likely set a precedent on pricing for all future Kinect required games.
Marketing
An often overlooked aspect of the Kinect is its ability to interact with other forms of media such as music and movies through gesture based controls. Microsoft’s current marketing strategy, as seen with its first montage trailer, mentions the Kinect’s ability to interact with Zune videos and makes no reference of its ability to interact with other more popular forms of media. Given the large risk inherently involved with launching any new hardware peripheral, it may be best for Microsoft to put their best foot forward and advertise the Kinect’s ability to interact with all forms of media such as Netflix and DVDs. Focusing too much on the Zune service could confuse consumers about the Kinect’s interactive abilities and limit the overall interest in the Kinect product. However, EEDAR suspects Microsoft will fine-tune their marketing strategy as the official launch date nears.
Overall
Kinect Overall, EEDAR is very positive on the Kinect. The Kinect’s success this holiday season is crucial to rekindling the energy among the casual and mainstream audience, the same audience that has exacerbated software revenue declines since 2009.
New Hardware Options
EEDAR always felt the Xbox 360 Arcade SKU, which didn’t come with a hard-drive, to be counter-productive to Microsoft’s goal of delivering both physical and digital entertainment to the masses. Now with the new Xbox 360 4GB SKU, even price sensitive consumers can still enjoy Xbox Live’s Library of hundreds of digital games.
