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10% or less to purchase Kinect add-on

Might only sell 2 to 4 million units by March
With the news on Kinect all abuzz yesterday, now the predictions are coming from the leading industry analysts and the news isn’t going to be what Microsoft might want to hear. Analysts are already predicting that Microsoft will be hard pressed to move many units before March 2011 and, in fact, analysts think that the number sold will be less than 4 million.

If Microsoft is able to move 4 million units of Kinect, that would represent only 10% of the total numbers of existing Xbox 360 units. This is a number that isn’t good at all for either Microsoft or the third-party software developers/publishers that were expecting a much higher sales rate.

When looking at the situation, it seems that most analysts agree that the price point is the problem; and while they believe that early adopters will drive sales at the $149 price point, they believe that the majority of owners who want Kinect will wait till the price falls before jumping in.

As we pointed out yesterday, analysts seem to agree with us that the Kinect Xbox Holiday bundle does represent a solid value, but things start to get much tougher when looking at the add-on unit for existing users. The add-on unit does have a pricing advantage over the Sony Move product, but only when you figure in the second controller. No one seems to think Microsoft (or Sony for that matter) will challenge Nintendo with their offerings.

Software will still be the key and the need for a must-have title to capture gamers and make them want to buy Kinect is what is needed. Right now, it doesn’t seem that Microsoft has anything in the pipeline that meets these criteria, which makes many believe that Kinect is more of an impulse buy and a hard sell at $149. If Microsoft can get the price to $99 we believe that things will improve, particularly if more compelling software continues to arrive for Kinect.
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