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Microsoft Confirms Kinect Pricing, Analysts Debate
Microsoft Confirms Kinect Pricing, Analysts Debate
July 20, 2010 | By Leigh Alexander

July 20, 2010 | By Leigh Alexander
More: Console/PC

Following several weeks of speculation, Microsoft today confirmed the U.S. pricing options for its Kinect motion-sensing controller interface, offering a console bundle for new consumers and one for existing Xbox 360 owners.

An Xbox 360 with 4GB of internal Flash memory will be sold in a $299.99 bundle "this holiday" with the Kinect sensor device and launch title Kinect Adventures, which features obstacle courses, river races and other one-on-one play activities. Kinect and the game will be sold independently of the console for $149.99.

In the UK, the 4GB Xbox 360 Kinect bundle will retail for £249.99 ($382) and also include Kinect Adventures, with the same package selling for €249.99 ($323) in mainland Europe. Microsoft is also selling Kinect and the game in a package for £129.99 ($197) in the UK and €149 ($193) in mainland Europe.

The pricing is in line with what analysts, retailers and media had expected, although, as Lazard Capital Markets analyst Colin Sebastian notes, "above the $99 price we view as the 'sweet spot' for the device."

EEDAR's Jesse Divnich is more positive about the pricing, noting key differences between Kinect and other peripheral devices that have been on the market before.

"EEDAR feels that $150 is an appropriate price for the Kinect," he says. "Previous peripherals with mass-market appeal, such as band kits, have sold millions of units worldwide even while priced north of $150."

But unlike items like band kits that are tied to specific games or genres, "developers will be able to optimize its software for years to come," Divnich adds, recommending investors and industry-watchers take a different tack in evaluating Kinect's market positioning than they would with devices seen at retail in the past.

The $299 bundle is, according to Sebastian "a good value, in our view, which could spark renewed interest in the platform this holiday." Divnich says that renewed interest is key: "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," he points out.

Kinect will have 15 games available at launch, including Kinectimals, Kinect Sports, Kinect Joy Ride and Harmonix's Dance Central, all of which were shown at E3 -- with the latter receiving an especially positive reception. Titles will be priced at $49.99, and Divnich says "given the likelihood [Dance Central] becomes one of Kinect's top sellers it will likely set a precedent on pricing for all future Kinect-required games." Games will sell for £39.99 ($61) in the UK.

Retailers are already accepting preorders for both the $299.99 console bundle and the $149.99 device-and-game package. Microsoft says those who pre-order receive a token to download three additional Kinect Adventures levels as a bonus exclusive to pre-ordering. Some retailers will offer their own bundles; Walmart has previously revealed it will offer an online preorder bundle containing the device, a $30 gift card, and a choice of one Kinect launch title.

Microsoft additionally confirmed that the Xbox 360 console with 4GB of internal memory and all the other features of the recently announced 'slim' Xbox 360, including redesigned styling and wireless connectivity, begins shipping on Aug. 3 in the U.S., and will be available for $199.99. The 4GB console will retail for £149.99 ($228) in the UK and arrive on August 20.

As for Microsoft's competition, Sony has already announced its own bundle offerings for its new PlayStation Move gesture interface -- a $399 bundle that includes a PlayStation 3 console; the Move controller; the PlayStation Eye camera required for it to work, and the now-standard DualShock 3 controller together, alongside Move launch title Sports Champions.

Users who already own a PS3 can get that entire package, minus the console itself, for $99.99, and users who own the console and the Eye camera can get the Move controller as a stand-alone for $49.99. The the separate Navigation controller, which offers functionality with Move comparable to that of Wii's Nunchuk control stick add-on, is not included with any of these bundles; it's set to sell as a stand-alone for $30.

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Marcus Miller
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The graveyard of useless accessories...Nice!

Hayden Dawson
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"But seriously folks, I honestly can't guess which way this will go for MS. If anything I guess the Kinect is at least an outrider to a more coherent device strategy."

@ Cam

I'd say you are likely right on there. Use prototypes of intended tech for your next product to help pay their way a bit and to prep the community for greater changes. I'd also tend to suspect that similar reasons are behind why everyone's digital push still seems a bit scattershot -- in terms of continuing to limit what is made available to download while at the same time increasing the means to download. Build the backbone before fleshing everything out.

Of course the danger is that the customer will resist or balk at the new thingys....but only time will tell there.

Fábio Bernardon
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The true question here is how different Kinect will look at the eyes of consumers from the Wii:

- the ones that already own a Wii have to see something very appealing to them that the Wii does not provide (and that will be hard - I don't think the "no controller" is compelling enough);

- new consumers will check what is the price for the Kinect experience and the Wii experience, and will look for advantages in the Kinect that justify its larger price tag.

Nintendo seems to already be countering it by reducing the price of the Balance Board (I have seen it for $65 already). It is going to be hard for MS to sell it to either new or old consumers.

Ken Kinnison
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I think MS is screwed at this, and that's as much as I don't want them to be.

While it's not for me, I think it should have mass appeal, but it looks to be an expensive device. And since its a one shot, it looks even bigger in comparison to the nickel and dime side of the other two.

People are pretty bad about differentiating 'total additive cost' versus one time up front cost... although they make a good point with the drum kit comment.

Adam Flutie
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I've said it once and I'll say it again, this isn't going to work. Console releases are separate than their older models, as such this is really a peripheral release... and peripherals bomb, or at most make it into few hands before the next console comes out. Kinect probably could have amounted to something if it would have been included in the next gen (edition) Xbox. Instead, it is going to come out and kill all motivation / hype it could have had going into the next gen.

From a consumer standpoint, I would have to admit I think my 7 and 4 year old would think Kinect is pretty darn cool. But we already have a Wii and a X360... they are spoiled enough. Catch you next gen MS... maybe...

Jason Brau
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Tough sell when you can get an entire Wii console for nearly the same amount. Which has the advantage of 2 years of maturity and a larger game library.

It is a great concept and I wish it the best, but they have really backed themselves into a corner.

John Gordon
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Coming this Christmas:

Wii bundle $200

Xbox360 bundle $300

PS3 bundle $400

I think sales are going to be like Christmas 2006 all over again. Wii will kill. Xbox/Kinect will do ok but nothing to write home about. PS3/Move will totally bomb.

Sean Kiley
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It's all playing catch up. If you want to win in this market, you have to do something new, not do the same thing another way 4 years later. However, I'm sure everyone will remain profitable in the end.

Camilo R
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I'd say it doesn't look good for MS as the rest but then I thought the same thing about the Wii before it came out. So I'll just wait and see what happens with this.

Richard Putney
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OK, from all of the users at Gamasutra to all of the folks at MS -

1, 2, 3 "WE TOLD YOU SO!!!!!!"

"...seriously... what were you thinking?"

Duong Nguyen
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At that price point Kenict might not pick up enough users, who do they expect to develop for a 4-5 million user base market? I would have thought they would have aggressively priced it too ensure enough user base for a sustainable 3rd party developers, but it seems future games might be Microsoft only. Maybe they have some marketing numbers which would indicate otherwise, well see..

Doug Poston
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@ Richard: Please don't include me in "all the users at Gamasutra". ;)

I still have some hope for Kinect (for reasons I've stated in the countless other threads on this topic).

Robert Green
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PR tip for Microsoft: If the price of your new product leaks out, even on your own site, and people complain it's too high, and you tell people "no, no, it's all just speculation"...... don't then announce the exact same price and expect people to like it!

Also I have to wonder if the $50 price difference between the bundled version and the standalone version doesn't make existing 360 owners feel a little ripped off. Why exactly should I, a long-term 360 owner, pay $150 for something when a person only buying one this christmas can get it for an extra $100? It's almost as if MS, beyond not seeming to care about the hardcore gamers with Kinect, actually aren't focussed on anyone who currently owns a 360 at all.

On the other hand though, their lineup is largely multiplayer focussed, so I'm sure they'll go to great lengths to point out that once you add a second player to a wii, it's almost the same price, and for PSMove, a lot more.

Ofer Rubinstein
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Technologically, kinect is far superior than the Wii mote.

While people playing the Wii always end up sitting on the couch and doing little wrist movement to control the games, in Kinect you have to use your whole body.

I hope people will see that Kinect is a lot different and a lot better than the Wii mote. It is also a lot more fun to play.

I was just talking to a woman who said her son wants an XBOX, after I have told her about Kinect she was very excited and said this might be exactly the thing that will convince her to buy him an XBOX.

Cody Kostiuk
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The only problem with the Rockband peripheral analogy is that everybody was already familiar with Guitar Hero, it was a proven success, and everybody that bought it already wanted it before it came out. With Kinect, Microsoft is asking people to spend $150 on speculation and faith.

Merc Hoffner
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@ Ofer

It bloody well better be more advanced - for about four times the money and four years worth of advances in technology (and sacrifices for buttons, audio feedback and rumble), you can't possibly expect it to be less advanced.

Merc Hoffner
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The music genre comparison as a positive is a fallacy for multiple reasons:

1. The music games were much more successful when they were cheaper.

2. The collapse of the music game market has largely been recognised as due to to the hike in prices way past the $100 mark in the face of the economic disaster.

3. The music games have complete internal appeal, being the killer app for themselves: Kinect's 'killer' app is yet to emerge.

4. The music games had great sales across all platforms, but per platform sales were not on the scale to support a huge sub-platform endeavor. i.e. 2-4 million sales is great for a game, but 15-20 million ala wii motion+/wii fit is probably needed to support the rebirth of the 360.

5. Music games were sold as stand alone, but for the casual audience Microsoft is trying to hit, they're going to have to sell them a console as well, driving the price up to a $300 minimum. One may argue the Music games were casual games sold to casual gamers on core systems - but the reality was they were pseudo-casual games that didn't drive meaningful platform adoption amongst non-core gamers. They probably did more to help sales of the the Wii to casuals than the 360.

Fábio Bernardon
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I have yet to experiment Kinetic, but saying it is superior than the Wiimote is not totally true. Can you aim at the screen at great precision? You can do that with the wiimote, but I doubt Kinect can do it for one reason: it does not have enough resolution.

The wiimote has a 1024x768 infrared camera on it that it uses to track the IR emitter. That is 1.5x the resolution of the console (720x480).

Kinectic, on the other hand, has a 640x480 color camera and a 320x240 depth sensor, which is not precise enough for pixel precision in its own rendered images (assuming they will still render the 720p images). Not very well though in this regard, but it is likely due to the lack of processing power for larger resolutions (otherwise games will not have any process power left to use).

I am curious to see how it turns out, though. I don't expect it to be used for serious games like the Wiimote is capable of (like RE4 - which can be played while you sit down), but so far it appears an inferior solution to me.

DanielThomas MacInnes
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As with pop music, the video game business is driven by hits. You need quick, accessible, iconic hits. Nintendo is a master of this, and that is why DS and Wii are enormously successful. As of now, Kinect has no hits. There may be a decent game among the lineup, but there's nothing that is distinctive or innovative, nothing that stands out, nothing that distinguishes itself from Nintendo. Scott McCloud's theory of the Icon holds; videogames, especially arcade games, are an iconic medium.

I don't see any imagination or creativity in any of these launch titles. What I see is Microsoft and other developers attempting to copy Wii Sports. The problem is that they don't understand this new market, the Expanded Audience, and judging from all the terrible shovelware on the Wii, they aren't interested in learning. Instead, the phrase "casual gamer" is used, often with derision, as though these people are simpletons who aren't worth the attention. "Casual" knockoff games are handed down to the third-string development teams, and the result is usually a third-string game.

I would suggest that the very phrase, "casual gamer," is a handicap. This is a stumblebum, more of an excuse than anything. I would argue, instead, that the Expanded Audience is composed of Non Gamers and Lapsed Gamers. These are not simpletons, and they are far more savvy and skeptical an audience than the "hardcore" crowd. You only need to see third-parties' frustration with their failure to connect (oof!) with their "casual" games to realize this.

Meanwhile, Wii Sports becomes the best selling video game of all time; Wii Play and Wii Fit sell a staggering amount; and Super Mario Bros - 2D Mario! - is the hottest game of the year. These are very sophisticated, nuanced games, with skill and depth worthy of their arcade heritage. These are, in fact, arcade games. Why is Nintendo so successful right now? It's because there is a great demand for arcade games, and they are the only ones feeding that market.

I don't invoke Nintendo to start any childish flame war or bash Microsoft (I'm old enough to remember Atari vs Intellivion fights). I'm pointing to Nintendo as an example of how to address this Expanded Audience. These cats know what they are doing, and I don't believe the rest of the industry has paid enough attention or respect. I don't think Microsoft "gets" it. I don't know how much their history as a company affects this, but there's a world of difference between Windows and Office and the arcade games at Aladdin's Castle. They are venturing into a realm they know little about, and it shows.

As I've said, it's all about hits. If Microsoft conjured one great, iconic hit, then Kinect will be a different story. I'm always reminded of the Atari Jaguar, which was pretty much DOA when it arrived...and then The Yak dropped Tempest 2000 on our laps. I'd still buy a Jaguar just to play Tempest 2000. THAT is an iconic hit.

Ofer Rubinstein
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The wii mote was marketed as "motion sensing" device. If all the motion you are doing is move your wrist a little bit, then it's not playing a big part as a motion sensing controller.

You can sit on the couch and play with a gamepad as well, moving your wrist while playing doesn't add much to the experience apart from the experience of straining your wrist.

Aiming to the screen? That's nice, but it existed for decades in the gaming industry.

Kinect will bring a truly new way to play games, whether you like it or not. Whether it will be successful or not.

It's something new and it works, unlike the nintendo gimmik.

Kevin Jones
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@ Andre Thomas

" Look to me like Kinect will be soon joining the "the club" e.g. the very "club" the virtual boy, SEGA-CD, and EyeToy already belong. "

/sarc Yeah..Kinect is so "doomed", it shot straight to become the # 1 selling item on Amazon UK, right after it became available for pre-orders there, outselling every single Wii game console or accessory.

That is on top of shooting straight to # 1 on Amazon US and in the top 3 on Gamestop when Kinect became available for pre-orders in the US afew weeks back.

Merc Hoffner
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@ Fábio Bernardon

To clear up a small inaccuracy: tinkering in the Wiimote's DSP found that the camera actually captures at a much lower resolution and interpolates this up. It can do this reliably because it only has to refine the positions on two simple point source lights - i.e. linear interpolation of the surrounding pixel intensities actually will give you the true sub-pixel positions unlike ordinary image interpolations.

On the Kinect front, I believe the 320x240 resolution of the IR time of flight camera is more limited by the scope of the technology than the processing demands or quantity of the input data: The sensor is very unusual in consumer electronics and likely expensive. Moreover, a lower resolution gives each pixel the higher surface area needed to sense the very dim reflected IR photons. Finally there may not be much point of a high planar resolution on this camera when the depth resolution is likely limited (for instance the device would need to measure down to 300 picoseconds for a 5cm depth resolution) and can likely be refined by edge detection analysis of the RGB image anyway. The use of only 640x480 in the RGB camera is a clear indicator of cost cutting where possible. It's telling, and worrying.

But yes, you're totally right, the Wiimote still has a very distinct edge at resolving pointing functions over Kinect. Or PS Move for that matter. Move can return an accurate absolute position, but angular orientation is measured by a combination of a gyro, accelerometer and magnetometer (compass) - all subject to a lot of wobble and noise. The inherent design of the Wiimote will almost certainly guarantee it the lead in easily pointing at stuff on the screen - that is pretty important as it turns out.

Fábio Bernardon
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Thanks for the clarification, Merc. I had no idea about those insights :)

Robert Green
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Merc - I was under the impression that a cursor with the PS Move would simply use the position in the vertical plane, like a mouse does in the horizontal plane, and not by trying to infer what the controller is pointing at. This also enables you to hold it upright like a trigger, which is more comfortable over long periods than holding it forward like a remote.

In concept, this sounds like it would be worse than something you're directly pointing at, but in practice you don't point directly at the wii cursor either, because that would vary based on the size of your display.

Merc Hoffner
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Yes, but the result is that pointing across the screen requires you to make huge sweeping motions at all times that either grow with distance from the screen or sacrifice positional precision - not ideal, particularly for rapid shooters ala time-crisis or lounging way back on the sofa. Anything else requires the use of the sensors, which doesn't end up so pretty. Some of the playtesters noticed as much, though I'm sure it is being improved upon, and some combinatorial solution will be found. But it clearly won't be so direct or simple to implement as the Wiimote. That's the fundamental pitfall. On the other hand it can totally do the 1:1 translation tacking near spot on, and then augment reality - that's its advantage.

But we can apply the same argument to move as to kinect, only more severely as it's so similar in concept to the wiimote: it may very well be superior technology overall, but for the extra money, lack of standardisation, and 4 years of advances in technology, you can't really expect it to be any less advanced in any way? And really, the Wiimote's momentum (pardon the pun) means we'd expect the bar for entry should be a massive leap in capability, right? Is it one? Maybe? The jury's out, but with the current lineup it's not looking good.

Ofer Rubinstein
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Bottom line, the wii mote doesn't work too well. You can stand while you are playing and swing it all you want, but it doesn't really sense your movement that well.

All you need to do is to play that baseball game in Wii sport or Boxing game to see how bad is the wii mote.

About Kinect, we shall all see soon.