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Analysts React To Kinect Pricing Announcement

by Matt Helgeson on Jul 20, 2010 at 06:25 AM

On the heels of Microsoft's announcement that Kinect will officially be priced at $150, video game industry analysts quickly sent out their takes on the news. For the most part, the reaction seems positive – with some reservations.

Colin Sebastian of Lazard Capital Market Sales calls Kinect pricing "in line with expectations." However, he goes on to state that it is "above the $99 price point we view as the 'sweet spot.'" He seems more optimistic about the 360/Kinect console bundle that will release this fall. "A new 360 bundle with Kinect and a game will cost $299, a good value, in our view, which could spark renewed interest in the platform this holiday."

Lazard Capital is also hopeful that Kinect can help broaden the appeal of the 360 outside of the core gamers that make up its primary audience, and took time to praise Microsoft for pricing Kinect games at a MSRP of $49 instead of the usual $59. The company also sees Kinect-style technology being implemented in "connected TVs, living room PCs, set-top boxes, and other consumer devices" in the future.

Jesse Divnich of EEDAR also seems hopeful regarding Kinect's future at retail. "By examining peripheral pricing over the last five years, EEDAR feels that $150 is an appropriate price for the Kinect," comments Divnich. "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."

He also feels that the unit should have a longer lifespan than slumping music peripherals like Rock Band and Guitar Hero.

"Game specific peripherals have a limited shelf-life in terms of appeal; there are only so many sessions of Guitar Hero one can enjoy before game fatigue sets in. With the Kinect, however, there is the possibility of a wide array of games across a broad range of genres, potentially giving the Kinect a much longer shelf-life than a typical peripheral," said Divnich. "The Kinect should not be viewed as a typical video game peripheral that is retired from one’s active playlist after 90 days, but rather a consumer enabling device that has the potential to revolutionize the way we interact with all forms of media on a daily basis."

He summarizes EEDAR's position on Kinect as "very positive" and echoes Lazard Capital's hope that the unit can help energize the casual game audience. He also predicted that Harmonix's Dance Central will be the best-selling of the Kinect launch titles.

Lazard Capital also says that Kinect is already in production, and should launch with "adequate supplies." The company expects Microsoft to sell around 4 million Kinect units through the end of the fourth quarter this year.