Is Microsoft's Kinect too expensive?

Posted by Aharon Etengoff

Is Microsoft alienating core gamers by pricing its Kinect peripheral at $150?

Well, Wedbush Morgan analyst Michael Pachter believes the majority of core gamers are likely to be "put off" by the unit's "high" price.

Is Microsoft's Kinect too expensive?"My bias is that most core gamers will wait, but that 5 - 10 per cent will buy it. That suggests 2 - 4 million standalone units [sold]," Pachter told CVG.

"[But] if they can afford to cut price on the [new 250GB Xobx 360 S] console and to bundle Kinect for $100 more, we could see a $349 bundle next year."

According to Pachter, such a price cut would provide a definite advantage over Sony's new controller. 

"[Still], at current pricing, it's only a $30 advantage, given that the all-in cost for a complete Move package is $180 and the all-in cost of a standalone Kinect is $150."

However, Pachter noted that even a lower-priced Kinect was unlikely to pose a "meaningful threat" to the Nintendo's Wii.

"The all-in cost of the Arcade bundle is $299, still $100 above the Wii, although some people will find that attractive. 

"[And] the all-in cost of the PS3 plus a complete Move package is $479; $399 for the PS3, game, Move and Eye, another $80 for an extra Move and a sub-controller."

Meanwhile, EEDAR analyst Jesse Divnich told TG Daily that $150 was an "appropriate" price point 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. [So], Kinect should not be viewed as a software peripheral, as most peripherals are, but rather a hardware peripheral."

Divnich added that EEDAR remained "very positive" on the Kinect.

"The [platform'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."