Microsoft Will Sell 3 Million Kinect Systems This Holiday Season, Says Analyst

Microsoft Natal Girl

Microsoft yesterday confirmed its Kinect pricing and also unveiled a new 4GB version of the redesigned Xbox 360.

Although EEDAR’s Jesse Divnich believes the $149 price tag is “appropriate,” Lazard Capital Markets’ Colin Sebastian says that $99 would have been the “sweet spot.” Nevertheless, Sebastian does still anticipate the Kinect doing well on the market.

In fact, he believes Microsoft’s already well into the manufacturing process.

“We believe that Kinect units are already in production and should be available in adequate quantities for the November launch. We continue to expect that roughly three million units of Kinect will be sold worldwide in 4Q,” he said. “Microsoft will also begin selling a stand-alone 4GB Xbox 360 in early August for $199, which should help the platform sustain improved sales momentum. Over time, we also anticipate that motion sensors will show up in connected TVs, living room PCs, set-top boxes and other consumer devices.”

Overall, Sebastian thinks that Microsoft can succeed in attracting more casual players.

“Kinect should broaden Xbox appeal. Games utilising the Kinect sensor will initially include fitness, dance, sports and kart racing, suggesting that Microsoft is targeting a casual audience. Additionally, Microsoft is pricing many Kinect games at $49 – below the standard $59 price point for Xbox software, but competitive with Wii games,” he said. “While there are still questions regarding the use of motion controls with core titles (e.g., first-person shooters), we see Kinect as a likely driver of accelerating unit growth for the Xbox.”

And in order for the games industry to see more growth as a whole, all companies involved will have to do better in appealing to the casual crowd. “Re-engaging the casual market is one avenue to improve industry growth trajectory. While a number of ‘core’ game titles continue to sell well, lukewarm sales of many casual console and handheld games remain a significant headwind to industry growth this year. As such, we believe that Kinect, along with Sony’s Move and Nintendo’s 3DS handheld, are new potential catalysts to drive renewed interest in video games,” Sebastian concluded.

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