Lazard Capital Markets' Colin Sebastian notes that the pricing is in line with industry expectation, but misses the "sweet spot" of $99. He claims the $299 bundle with the 4GB drive is "A good value, in our view, which could spark renewed interest in the platform this holiday." He also remarks that the $49 price point for Kinect software will make it competitive with Wii games, concluding that "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."
"A good value, in our view, which could spark renewed interest in the platform this holiday."- Lazard Capital Markets' Colin Sebastian
EEDAR's Jesse Divnich feels the $150 price is "appropriate," noting that "previous peripherals with mass-market appeal, such as band kits, have sold millions of units worldwide even while priced north of $150." He also points out those band kits were for only one game (or genre), where Kinect has wider applications. He believes "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." Overall, Divnich feels that Kinect is "crucial to rekindling the energy among the casual and mainstream audience, the same audience that has exacerbated software revenue declines since 2009."
Wedbush Morgan's Michael Pachter thinks that a Kinect price cut will occur sometime next year, pointing out that "the Kinect bundle costs only $100 more than the cost of a standalone console, so they can afford to sell Kinect for $100." He feels the price of the $150 standalone bundle is "too high" and "core gamers will be put off by the price." He continues, "My bias is that most core gamers will wait, but that 5-10% will buy it. That suggests 2-4 million standalone units." Mr. Pachter concludes that the "takeaway" is that Microsoft can afford to cut the console price and bundle Kinect for $100 more, with a $349 bundle next year: "That would provide an advantage over Sony. At current pricing, it's only a $30 advantage, given that the all-in cost for a complete Move package is $180 and the all-in cost of a standalone Kinect is $150."
"At current pricing, it's only a $30 advantage, given that the all-in cost for a complete Move package is $180 and the all-in cost of a standalone Kinect is $150."- Wedbush Morgan's Michael Pachter