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Kinect impact to be 'negligible' - Analyst

DFC Intelligence predicts Microsoft's Xbox 360 motion-sensing add-on will be footnote for hardware generation, console "clearly on the downside of its lifecycle."

Ever since Kinect was revealed as Project Natal during Microsoft's 2009 Electronic Entertainment Expo press conference, it's been evident that the device is aimed at drawing in the casual market dollars. And while the publisher appears to have a healthy amount of casual-friendly titles queued up for the Xbox 360 motion-sensing add-on's November 4 launch, retailers have begun to balk at the device's apparent $150 price tag.

Kinect's potential as game-changer is in question.

Kinect's potential as game-changer is in question.

Analysts are also skeptical on whether Microsoft will be able to capture the casual crowd that so readily flocked to Nintendo's Wii. According to a recent investor note from market research firm DFC Intelligence, Microsoft's ability to attract the casual consumer with Kinect is suspect, based on its track record with drawing in the mass market crowd.

"Microsoft is putting almost all its eggs into the Kinect as a way to appeal to the 'casual' consumer and expand its user base," DFC notes. "Of course, Microsoft has been trying to do this for some time, and in that regard, the Kinect can be seen as the latest in a long line of products intended to make Microsoft a mass market entertainment company. Unfortunately, based on what we have seen, DFC continues to feel that Microsoft is going to struggle to expand beyond its core audience."

Though largely dismissive of Kinect's apparent technical limitations, such as recent reports that the device only recognizes two "active" players at a time, DFC believes that Microsoft is simply unable to create a new, mass-market entertainment device.

"In its business software, Microsoft has been successful in analyzing what works for users of other products and incrementally incorporating those features into Microsoft products," DFC said in its report. "The problem is developing hit entertainment products simply does not follow that model." The report went on to note that while Kinect might have an impact on the fitness genre, its overall impact on the hardware market will be "negligible."

"The Xbox 360 has some good years left, but the platform is clearly on the downside of its lifecycle," the report concluded. "The longer term issue facing the console manufacturers is that the business model of launching a new hardware system every five years simply no longer works. It is expensive to develop powerful new hardware, especially when the practice has been to sell it below cost. Those costs are harder to justify when the prevailing consumer trend has been to less-involved gaming experiences that do not require high-end graphics."

That said, DFC believes that the Xbox 360, along with the Nintendo Wii, will continue to see a slowdown in 2010 and 2011, while the PlayStation 3 continues to gain momentum.

479 Comments

  • LilRoss2k3

    Posted Dec 19, 2010 10:45 am GMT

    well...we all saw how accurate "analysts" are...kinect is selling like crazy at the moment....but it'll eventually go the way of the wii. in the end, real gamers want/need actual controllers and not gimmicks.

  • DragonAtma

    Posted Nov 17, 2010 5:10 am GMT

    As soon as I saw that they'd charge $150 for the kinect, I knew it would fail. It would seem they learned nothing from Sony's blunder of charging $600 for a console.

    On the bright side, prices should be much lower for Sony and Microsft's next consoles.

  • Dirk13

    Posted Nov 16, 2010 3:24 pm GMT

    less involved gaming? wha? I dunno, this article seems slightly mis-informed about the successes and pitfalls of Microsoft's efforts to break into the market. I do not like.

  • Ratchet_Fan8

    Posted Nov 16, 2010 2:29 pm GMT

    Move loooks like its gonna evolve like the WII did..

    While Kinect is kinda stuck.
    I dont know you can make a variety of 150+ titles on kinect without being gimicky.

  • Slyster1181

    Posted Nov 16, 2010 1:01 pm GMT

    The Move and Kinect is just an attempt for Sony and MS to get a few more sales for this gen.. Neither of them are putting any " eggs " anywhere.

  • Hatemachine25

    Posted Oct 31, 2010 3:12 am GMT

    Am I the only one becoming sick of these gimmicky piles of rubbish?, we saw the Power glove come and go like a Fart in a hurricane, we saw the Nintendo Zapper and it's offspring relegated to one game type, Rail shooter, or modified Clay pigeon blaster, Dance dance revolution mats, Wii controls that 75% of the games are either terrible with or work better with a peripheral CONTROLLER setup.

    The Eye toy and it's expansive lineup of high quality games, you want to change how gamers play games change how they SEE and FEEL them, Refine VR technology and make it available, 13 years is a LONG time by technology standards for this kinda tech to have just dropped off the face of the earth.

  • DS_fan_atic

    Posted Oct 12, 2010 5:25 pm GMT

    If I was rich and could afford 3 different home theatres, I would have a Wii room, a 360 room, and a PS3 room in order to fit all of these peripherals. However, I'm not and will be sticking to Wii for my motion control needs. I'll keep the PS3 and 360 the way they were meant to be.

  • metroid24

    Posted Oct 12, 2010 1:59 pm GMT

    yeah i see connect going far everyone is beeing al negitive about it im really excited with games like dance central star wars sports konectanimals forza and more i know it will make it far cant wait for it to prove people wrong

  • calipso324

    Posted Oct 11, 2010 7:42 pm GMT

    P.S BOOOO DFC

  • calipso324 posted Oct 11, 2010 7:38 pm GMT (does not meet display criteria. sign in to show)

    calipso324

    Posted Oct 11, 2010 7:38 pm GMT (hide)

    well I am still getting kenict 4 sonic free riders

  • HollowNinja

    Posted Oct 7, 2010 10:38 am GMT

    I'll be glad to see it fail, too.

  • Petri87 posted Sep 10, 2010 10:12 am GMT (does not meet display criteria. sign in to show)

    Petri87

    Posted Sep 10, 2010 10:12 am GMT (hide)

    "That said, DFC believes that the Xbox 360, along with the Nintendo Wii, will continue to see a slowdown in 2010 and 2011, while the PlayStation 3 continues to gain momentum."

    Wasn't the 360 the best selling console the 3rd month in a row whit PS3 in last(of the three) Sooooooo, DFC are wrong already

  • Voltergeist

    Posted Aug 26, 2010 11:02 am GMT

    LOL! Ah, moron pundits. Too bad we don't ever get articles showing all the people whose predictions were stupidly wrong when things actually succeed or fail.

  • funkyfritter

    Posted Aug 26, 2010 12:14 am GMT

    Does this really come as a surprise to anyone? I thought it was pretty clear from the start that the wii has already taken most of the casual business and that motion controls won't provide a truly immersive experience until they figure out a way to provide physical output as well as input.

  • seriousplayer_d

    Posted Aug 12, 2010 6:03 am GMT

    People are getting tired of all that motion sensing crap. You also need GOOD games if you want something to hit the market.

  • dr_taffin

    Posted Jul 18, 2010 11:52 pm GMT

    I predict this will be almost as successful as the other great add-ons in console history, the Sega CD and 32X. Almost.

  • YodaOfTheEmpire

    Posted Jul 13, 2010 6:10 am GMT

    There's no way this will ever be better than a Wii. Casual gamers want casual prices, and besides, with the Wii you get game franchises like Zelda, Mario, Donkey Kong, Kirby etc. Although a narrow inventory, a lot of more serious gamers have gone for the Wii just because of those games. Plus, the Xbox is notoriously faulty, so you might end up spending $50+ more on repairs as well.

  • hotwheels71

    Posted Jul 9, 2010 9:20 pm GMT

    I'm so relieved to hear that this product is meant for the casual gaming crowd. The way they were marketing it, it sounded like this great revolution in gaming which, 1) I didn't get because it's just a Wii without the remote; and 2) I was afraid developers were going to start making everything a Kinect game where you had to skip, hop and punch to play anything, and I'm sorry, but if I want a workout, I'll go to a gym. I play games to relax. Our family had a Wii, and it was a fun novelty, but we sold it after 6 months because we didn't use it much once the novelty had worn off. I really don't see the appeal of Kinect, but then I lost interest in the Wii after a few months, so I'm probably not a good judge. I'm just glad to hear they don't expect us serious gamers to play everything this way, because I am NOT interested in that at all.

  • Blazenglory posted Jul 9, 2010 6:04 pm GMT (does not meet display criteria. sign in to show)

    Blazenglory

    Posted Jul 9, 2010 6:04 pm GMT (hide)

    I own a 360 now, I'm heavy into multiplayer and it IS the best online service in terms of lag, etc. I'll probably get kinect, just to add variety to the mix, and in the future (the way this article states) if MS doesn't produce a new console i'll get a ps3 in a couple of years IF and MAYBE there games are not mere mirrors of what the xbox can produce and actually far exceed what is being produced now and live up to all the hype of what the ps3 can "maybe" do. And just to spit off about.....the kinect may be only 2 people "maybe" per console but some games todya don't' even have 2 play splitscreen on a console, and u have to remember all the people u can play with on live as well, if they don't incorporate live into kinect game they're just retarded.
    -END-

  • Dirk13

    Posted Jul 9, 2010 5:54 pm GMT

    Well I mean they already extended the console life cycle an extra 2 years from the economy, so this isn't news....however, I dunno, I do agree with the Kinetic part, I am just not impressed by the Wii or any of this motion crap....not yet anyway,give me Minority Report + and mayyyybe .

  • cruzerramos

    Posted Jul 9, 2010 11:22 am GMT

    DFC Intelligence must be crazy! They don't think a next-gen eyetoy for the 360 that costs as much as the system (Xbox 360 Arcade is the same price now) will sell! Even with all the awesome games coming out for it, like Kinectimals and Kinect Adventures!

  • MrUntouchable18

    Posted Jul 8, 2010 8:08 pm GMT

    I think it's to late for Sony and Microsoft to cash in on the casual gaming market. I mean Sony and Microsoft are so late and more expensive than the Wii. I'm blessed to own all 3 system but to tell you honestly my Wii gets the least play due to lack of games that interest me I can only play so many Mario games you know....

  • Charliesix

    Posted Jul 8, 2010 8:07 pm GMT

    I'm ready for the next-gen of consoles. Get it right this time, Big Three!

  • burizadokyanon

    Posted Jul 8, 2010 3:07 pm GMT

    @weapon_d00d816

    Clearly, you are a fanboy - sales figures clearly show the PS3 is increasing in sales, while the 360 is not. Although the 360 was about 10 million units ahead of the PS3 for a long time, by the end of this year, if PS3 trends continue, it will outsell the 360. Keep in mind that the 360 has also been out a year longer too. So yes, the PS3 will shortly be taking the #2 spot of this generation.

  • weapon_d00d816 posted Jul 8, 2010 1:21 pm GMT (does not meet display criteria. sign in to show)

    weapon_d00d816

    Posted Jul 8, 2010 1:21 pm GMT (hide)

    How is the PS3 "gaining momentum"? Not to be a fanboy, but the 360 has everything the PS3 does, but the 360 does it better. And why is there no mention of the total copy "Move"? The way I see it is that Sony just likes to spend millions on advertisements to make it look successful.

  • dtujd2

    Posted Jul 8, 2010 11:16 am GMT

    While I agree with the analysis of the article, my bigger concern is with the overall industry picture being portrayed here. Will this new desire to really capture all the casual gamers, and their money, mean that those of us who are hardcore gamers will just get shafted in the coming years? Nintendo and MS need to think about new consoles, but according to this they probably won't because casual gamers don't need a new console. Games on the PS3 have not really come close to maxing out the power of that console so I agree there is much room for growth there. Interesting times ahead.

  • Dark_Infinite

    Posted Jul 8, 2010 11:07 am GMT

    ill wait for some decent reviews before buying this..oh and buying an xbox too
    haha

  • wwlettsome

    Posted Jul 8, 2010 10:43 am GMT

    Anything MS and Sony learn in this gen will help them figure out what to do with motion controllers in the next gen. In the meantime I don't have big expectations from either of them...especially Kinect. And BTW after pulling their Kin phones off the market like a week after launch MS might want to stay away from the whole "Kin" naming convention. What did these guys do go to some corporate offsite marketing brainstorming session?

  • iking47

    Posted Jul 8, 2010 10:31 am GMT

    Most point out in their comments that the Kinect and/or Move won't capture the casual gaming market due to price, price and price. This is because most people assume that casual gamers don't have consoles and need to buy the full set (console, Kinect/Move and a game) in order to play, meaning a price tag of at least $400.
    However what most people forget is that a lot of current/"potential" casual gamers already have access to a PS3 or Xbox360 in their homes, YOURS. Ever think about your mom, dad, sisters or brothers? How about that girlfriend of yours or your dorm buds. What Sony and Microsoft are banking on is that since a lot of households already have access to PS3s and Xbox 360s then there is a significant number of casual gamers who will only need to buy the peripheral and a game rather than needing to buy the console.

  • sieg6529

    Posted Jul 8, 2010 10:12 am GMT

    for $50 more you get a whole Wii...

  • sonicmask

    Posted Jul 8, 2010 9:25 am GMT

    dude its microsoft.. even as an xbox player.. they lack hardcore in all aspects.. it will fail! and that price tag! Microsoft slogan" if it cost 20 to make we will sell it at 200!!!

  • IceJester45

    Posted Jul 8, 2010 9:18 am GMT

    @Bevmo,

    Kinect works with new and old Xbox 360 consoles. The only difference between the two is that you'll have to plug the Kinect into a power socket if you're using an old Xbox 360 (the new model has a specialized USB port that sends power to the Kinect hardware).

    So, Kinect will only run you $150 plus the price of a game. Still, Microsoft is trying to attract new customers with this thing. Like you, I wonder what kind of non-gamer will want to pay $510 for a new Xbox, Kinect, and game. That's a big investment for somebody who doesn't even play games.

  • aidsta

    Posted Jul 8, 2010 5:50 am GMT

    yay for ps3 =)

  • Pangamaster

    Posted Jul 8, 2010 5:50 am GMT

    @Bevmo

    I dont think that Kenetic only works with the new Xbox 360. And we can probably excpect a price drop early next year (probably around Feb.) because everyone knows how badly this is gonna do at launch

  • kpolicoff

    Posted Jul 8, 2010 4:45 am GMT

    This will never be a success. Period. The reason? Systems that have addons are BAD BAD BAD for developers. If you have a system that has a specific feature built in (for example, the motion tracking of the wii, the 3D screen of the 3DS), developers have no reason NOT to take advantage of this technology. 100% of their audience has it, so it's a feature that will be fully taken advanage of, and will not be a waste of their time to add to the game. Now... if a system doesn't have that device built in, only a small percentage of people will have it. Therefore, a small percentage of developers (more over publishers) will want to put the money into developing a game to utilize it. It's a waste of the developer's resources. Now, a game that simply has some features that use the device, but it's not needed (so it's really a novelty) will most likely still do well, but the full use of the device will not be realized. Manufacturers need to make sure EVERYONE has a unique addon... which means it has to be there when the system is released. Sorry to say... but Nintendo did it right with the motion controls... and they're going to do it right with stereoscopic vision on the 3DS. When the xbox came out, the majority of the systems came with the xbox live headsets... and most people had internet connections... so developers took advantage of it. how did sony's little camera deal do? not too well. How about the xbox's? Yeah. also not too well. I know I don't have one. I also don't see many games that really utilize it.

  • Bevmo

    Posted Jul 8, 2010 2:32 am GMT

    If Kinnect was only $75 AND compatible with current xbox consoles, then this would of been a major success...unfortunately, it's adverse to that

  • Bevmo

    Posted Jul 8, 2010 2:31 am GMT

    I have an xbox, so don't call me a fanboy..anyways...
    New console to support kinnect: $300
    Kinnect itself: $150
    Just ONE GAME to play for Kinnect: $60
    Total net price to simply play Kinect: $410..not so happy about that price..that's the price of over 2 Wii consoles

  • Sta1k4r

    Posted Jul 8, 2010 2:17 am GMT

    But isn't Kinetic body motion while the PSMove has a remote like the Wii? These both make the Wii obsolete but honestly? body motion and movement versus swinging around a remote? I know who's side I'm on.

  • RunningMansKid

    Posted Jul 7, 2010 8:52 pm GMT

    @TC_Squared
    I've been saying this ever since I heard the price!

    While I own all three I realize the Xbox is OBVIOUSLY more expensive than Wii and Kinect is an ADD ON which means it doesnt come with it meaning EXTRA cash to do what the Wii does better for casual gamers.

  • MissObvious

    Posted Jul 7, 2010 8:34 pm GMT

    "That said, DFC believes that the Xbox 360, along with the Nintendo Wii, will continue to see a slowdown in 2010 and 2011, while the PlayStation 3 continues to gain momentum."-Yay! Mayhap PS3 actually will finally get its turn to shine for a while!

  • TC_Squared

    Posted Jul 7, 2010 8:15 pm GMT

    I can't help but think that the price of the console plus the Kinect is just too high to attract the "casual gamer". Why would they spend $300 for the Xbox 360 S and $150 for the Kinect when they can get a Wii for $200 that comes with everything it needs?

  • GBPackersrule

    Posted Jul 7, 2010 8:11 pm GMT

    @BrianB0422

    Really? The "state of the art technology" that DOESN'T allow you to play music in games, talk to different people in other games, auto-sync trophies, transfer videos to the PSP, download without having to install afterwards, adjust settings on the XMB, and runs an awesome processor with a worthless graphics card with a pathetic 256 MB of RAM? Funny. The "technologically inferior" console seems to be able to do all that. I love my PS3, but it isn't my deity. The 360 is nothing to scoff at either.

  • MrHatnClogs

    Posted Jul 7, 2010 6:35 pm GMT

    @Jaden_Arbiter

    Sony and Microsoft have better hardware than the Wii so maybe you're right. And maybe they might have noticed that people will stop buying junk games after awhile (Shovelware) But what really makes me uneasy is when you see Microsoft paralleling Nintendo when it released the Wii. Announce a project, change it's name to symbolize togetherness, and than claim it's revolutionary. I especially worry when you got Farmer Bobby Kotick bombarding us Guitar Hero and COD games just imagine how much he'll try to milk Kinect and Move for what it's worth.

  • Frost259

    Posted Jul 7, 2010 5:35 pm GMT

    @Closetpan

    Because kinect is being forced down everyones throats I cant turn my Xbox on or go to a video game website without being bombared by ads for kinect and the super awesome game kinectimals OMG I get to pay 150 to play with tigers...wow. Sonys kinda like heres move its 50 bucks play it if you want, btw were making Infamous 2, Killzone 3, and Twisted Metal X. Microsoft is going nuts of kinect that some of there exclusives aren't getting the love they deserve. Basically nothing for Splinter Cell, Alan Wake, or Crackdown 2. I would like to see more on Reach but they only seem to care about kinect right now. Oh and btw im not a Sony fanboy I'm a gamer I own all three I enjoy good games. They come out on all systems, Mario Galaxy, Halo, Infamous, God of War, Crackdown, bought and played them all. Fanboys need to grow out of this crap that is killing the industry and just learn to play good games, thats really all that matters in the end.

  • XZ219

    Posted Jul 7, 2010 5:32 pm GMT

    Sony and MS are both a day late and a dollar short to the motion control game. It's Nintnedo's gig, and no doubt they have been working on a Wii successor longer than MS and Sony have been working on Kinect/Move. Not to mention you can get a Wii for nearly the same price as the peripherals for the PS3 and 360. Any casual gamers out there that don't have a Wii almost certainly don't have a 360/PS3, so why would they pay $350-$450 to get in on the late comers, when they could have a Wii for half that?

    Both Move and Kinect will fail, and fail hard. MS and Sony should stick to doing what they do best - bringing us great regular adult games instead of trying to jump on a ship that has sailed.

  • ebookerd1

    Posted Jul 7, 2010 4:32 pm GMT

    This in breaking news... Analyst are complet @$$ Hats!!

  • monson21502

    Posted Jul 7, 2010 3:30 pm GMT

    i wont balk at the price of kinect its self. but 60 dollar games will hurt it alot imo

  • Closetpan posted Jul 7, 2010 2:39 pm GMT (does not meet display criteria. sign in to show)

    Closetpan

    Posted Jul 7, 2010 2:39 pm GMT (hide)

    Wow allot of hatred for the Kinect. The article was so bogus wonder why it didn't mention the Sony's Move controller will also fail. Ohh Wait Did Sony get smart and not even release the piece of junk or is this just another fanboy article!

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