A recent report from a "trusted" industry source recently pegged Microsoft's Project Natal at $149 for its launch later this year (possibly October). This is much higher than we and many industry pundits had been expecting. If true, it makes us wonder what Natal's chances of success will really be. Microsoft believes they'll sell millions and millions right away, but with PlayStation Move being $50 cheaper, consumers may scoff at a peripheral being priced at half the cost of the console itself (for the pro model).
IndustryGamers got in touch with a few analysts to get their respective takes on the situation. Michael Pachter, analyst with Wedbush Morgan Securities, has been fairly bullish on Natal, but he acknowledged that pricing could be a problem. If the $149 price tag is accurate, Natal could face similar adoption problems as PS3 did initially, he said. "Without knowing which company's software lineup is better, I have to assume that software is not the deciding factor, which means that price will be. A 360 owner doesn't have a choice, nor does a PS3 owner, so price will only impact the 'whether to buy' decision, not 'which one to buy.' Fewer people will buy at $149 than will buy at $79, quite obviously. This is a similar dilemma to what PS3 faced at launch, being much more expensive than the competition. If the rumored pricing is true, I expect a similar outcome," Pachter commented.
Arvind Bhatia of Sterne Agee & Leach agrees: "I think $149 for a camera is a bit steep and not a mass market price point. If true, I would expect initial sell through to be mediocre. I think $50 to $79 is where it gets exciting for consumers."
Mike Hickey with Janco Partners noted that the rumored price does certainly seem too high. "Natal is an accessory to the Xbox, and its ultimate pricing at retail should take relative consideration. That is, it's hard to imagine an accessory priced at 75% of the hardware. Nintendo was very effective at targeting the mass market with a 250 retail price point, and we expect a Natal Xbox bundle to priced at a similar level."
He added, "If $150 is their eventual pricing, their goal to sell millions of units over the holiday could prove ambitious, although content will determine its ultimate success."
Finally, David Cole of DFC Intelligence didn't want to make any firm predictions based on a rumored price, but he told us that he's not too bullish on either Natal or Move to really bolster the video game market. "We are going to wait until after a full E3 briefing before making detailed comments and forecasts for the new motion platforms. Suffice to say pricing, bundling and the actual applications will be crucial. In our forecasts we have been fairly pessimistic about the ability of these devices to provide a market uplift," he said.
With that in mind, Cole does seem to think that PS3 and Move have an edge. "Right now our forecasts are that the PlayStation 3 will have the momentum and is poised to overtake the Xbox 360 over the next two years. However, based on what we learn and see more specifically about Natal that could be subject to change. I would just say right now we haven't seen anything yet that would make us change our mind."
4 Comments
May 28, 2010
The $149 HAS to be a head-fake by MSFT. I think their best bet is to come in just under PS3's Move bundle, which seems like it should be possible, since the cost of goods for a camera alone (even a fancy-schmancy one) should be less than a Camera + wireless controller setup, right?
No way its over $99.
May 28, 2010
Agree innerloop, this is Ronaldo crossover on their part. Betting unit will be $99 with a free XBLA game that uses the tech well...perhaps Ping Pong? :-)
May 29, 2010
I have always thought that $99 was high for my budget for a add on. But 149 is a obvious high point. Heck a few more dollars I can get a wii! Natal has more than A camera built into it, if it was a camera Eye toy would be able to do what it does. Off the top of my head it: recognize peoples faces, detect movements of several people simultaneously, scan objects into the game, sign you in by recognizing your voice, sign you in by recognizing your face, voice commands. And more.
But 149$? It is obviously cheaper than buying two WANDs if a WAND only costs $75 each that=$150 just for two! And to equal the five people interface of NATAL that would be 5X$75=$375. Heck even if the WAND only costs $49 that would still be $245 for five.
But still the NATAL had better come in cheap! Speaking of which I hope Sony is smart enough to know that people will think about buying at least two, and then balk at paying so
much.
They don't want to get caught with Microsoft running a commercial showing 5 people playing WANDS and hitting each other with them and then showing the cost comparison.
May 30, 2010
People aren't notoriously good at calculating the total cost of things. While its true that with Natal you get unlimited number of players because everyhing is just software.
But the average consumer doesn't look much beyond the cost of entry, so they are going to see $99 for PSMove vs. for Natal and make their judgement on that.
Neither company is going to run commercials touting price advantage, this aren't used cars. They'll sell potential and image and intangibles, you can bet on that.
Maybe one reason Microsoft migth feel compelled to overprice the Natal is specifically because they CAN'T offset some losses by sales of the controllers. Sony will, of course, price additional wands & navigation controllers well above their cost, so even if the $99 package is a break-even or loss, they'll still be profitable overall.
With Natal, MSFT needs to pretty much make it all back with one hardware sale and then software.