Microsoft is betting that motion-controlled, hands-free gaming will take off in a huge way, as it gears up to launch its much talked about Kinect camera system later this year. The company believes it will sell "millions and millions" this Christmas, and if that's the case, then maybe Caris & Co. analyst Sandeep Aggarwal is right.
As reported on Barrons, Aggarwal stated that Kinect could generate around $2 billion in incremental consumer spending on video games in the first year, and between 50%-60% of that could go directly to Microsoft. Aggarwal has based this estimate on a Kinect price of $149, with 15% to 25% of existing 360 owners buying Kinect, and another 1 million people buying new 360 consoles.
Although Kinect is widely rumored to be $149, this figure comes primarily from retail placeholders. Microsoft still has not officially priced the system. Kinect will be launching this November.
3 Comments
July 13, 2010
Talk about fantasy gaming! At a time when new games are struggling to hit sales projections at $60, anticipating huge sales of a $149 peripheral is unjustified. Especially since surveys show less than 10% of Xbox 360 customers looking forward to buying a unit. Microsoft has to have a more compelling software lineup, and better pricing, and a massive Kinect ad budget before I'll believe in a 15% to 25% penetration of the installed base. I think a flop is more likely than a runaway hit from what we know at this point, though the middle ground of selling perhaps a million units (counting bundles) through then end of 2010 is the likeliest outcome.
July 13, 2010
Only way I could see this happening is if they spend $2.5b on marketing and saturate TV.
What's the track record of this analyst? Any chance he previously covered the sub-prime mortage industry?
July 13, 2010
The bundles will do decent business. @ $149 Microsoft will essentially be selling 2 consoles. $99 would have been perfect but this $149 is not in my budget.