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Microsoft's Kinect Is Under Pressure to Connect .

WSJ Writes: Microsoft faces increasing pressure from investors to show a payoff from those investments, which amounted to $8.7 billion for the fiscal year ended June 30—bigger than the R&D budget for any other tech company.

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rebirthofcaos3273d ago

well if they have a "limited stock" in the stores then, it will be hard to meet the 3 mill.

Army_of_Darkness3273d ago (Edited 3273d ago )

Because they don't want to take the chance of over stocking a product that no ones gonna buy after the countless bad talk & reviews;)

MS is taking a chance with kinect, but at the same time not going full out retarded! lol!

MinskyM3273d ago

I don't think they are taking a chance. Jumping on the motion control bandwagon is Microsoft only viable option in the console market.

They have shut down almost all of their first party studios. And they have made it clear they aren't building new Xbox hardware.

Slapping some motion control on the old 360 hardware in hope of emulating Nintendo and the Wii seems like pretty much the only card Microsoft has left this gen.

Killed4Less3273d ago

^^ Yeah I guess great games wouldn't make it worth it?

Like there is some huge disparity between the Xbox and the other consoles.. Maybe you missed the memo but the Xbox isn't the one losing and is the #1 HD console. I love PS3 and all but I'm not living in dream land.

And MS has shuttered 3 dev studios this gen and has created 3 new studios this gen. They still can't compete with Sony first party numbers but you make it sound like they are closing shop and going bankrupt when they are just about to launch their biggest Xbox campaign yet.

DJMarty3273d ago Show
Army_of_Darkness3273d ago

I do not hate you. matter of fact, I prefer windows over mac os anyday... I just don't like the concept of kinect as I did with the ps eyetoy thats all.

morkendo233273d ago

feel sorry for MS investors if this dont pan-out
think they should left motion control to nintendo

PimpHandHappy3273d ago

how many kinects will it take to break even with the ad campaign? 500 million divided by 150 bucks....mmmmm

No FanS Land3273d ago

about 3.3 million units.

but there's also all the R&D to pay and the production costs too.

mrv3213273d ago

There's shipping the amount of retail, etc, the technology and production the time and money spent at game shows... I'd be surprised if they make $50 on each Kinect, I wouldn't be surprised if it's more like $10...

You have the big box, which means retailers may charge more for stocking it.
You have the shipping because the box is big then the shipping is even larger
You have the technology which costs a bit with 3 cameras and all that
You have the power lead which trust me they didn't want this power lead means testing which costs money
The device had to be tested no doubt
The $500 MILLION in adverts
The money spent aquiring patents and lawyers
The money spent aquiring 3DV and other firms with competing product, I mean 3DV was worth like 20 million
The R&D which cost a fair bit
The developement studios required to produce tech demos
The loss of income from transfering studios for core games
The cost at E3
The cost of the cirqe de soleil which is an estimated $10 million

If let's say Microsoft makes $50 from each Kinect sold, the cost without production must easily be $1 billion with all the pre-E3 TV stuff, the artist etc...

You really don't need to do the math to realise that that's equal to basically GTA IV's style and quality.

And don't even think I'm making this up, production is a minor start up cost and if Microsoft aren't in this for the long haul there shares will fall quicker than Rare.

Seriously the fact $1 billion is kind of realistic is a joke, even at $750 million which is the most likely that's still 15 Killzone 2 games... over 5 years, that's a Killzone 2 every 20 weeks... yeah... I know.

Hardcore gamers this is your choice.

You could have a new IP, with the quality, graphics, story, voice acting and over all quality of games like
So yeah, your choice... you could get 2+ AAA games ON TOP of what you aleady get or... Kinect :P

I wouldn't be surprised f Sony spent $75 million simply because a lot of this is mere, hey look we made this tech demo 10 years ago for fun... improve it and sold it... buy it :P

A lot of the games are dualshock 3+ move so little risk, the device probably doesn't cost as much. The shipping is less, the fct they can and will sell more sub controller etc...

I'm not debating which is best untill I try both but which is wisest?

Agent-863273d ago

Plus $150 is the retail price that includes the markup. Say, MS was to make $50 off of every unit (I doubt it would be that much, but let's give them the benefit of the doubt). That would take sales of 10 million units just to break-even with the $500 million marketing budget.

gamingdroid3273d ago (Edited 3273d ago )

Yes, but what none of you accounted for are:

- Kinect is intended to be a platform not just earning money from the hardware, but also software over the lifespan of a Kinect. That includes both retail software sold on disc and dlc.
- Kinect might increase Xbox Live subscription because of a new set of customers.
- Kinect might enable MS to sell more Xbox 360s.
- Research in Kinect technology will be distributed to other areas, including Windows. Some of the research also likely came from Windows already.
- Establishing a new brand
- Investment: If you look at any tech company, you will see a company is worth roughly 15-20 times it annual earning. That means, a $1 million profit yields a $15 million market capitalization. Of course this doesn't always translate, but you get the idea.
- The original Xbox cost a bundle of money, but the business is finally turning a profit in the last few years. Due to the high cost of investment, there aren't likely to be many competitors than can compete in this space as well.

It's much to soon to say if consumers will pick Kinect up, but I wouldn't doubt MS strategy is to sell 12-15 million by the end of 2011 with that sort of investment not mention huge expectations from third party.

btk3272d ago

@mrv321
Bubble for you. Good work on the analysis there.
Comes down to: Do you want 15 Halo quality games, or one crappy Motion controller rushed out the door to attack the Wii.

@gamingdroid
It is a piss poor excuse for a platform - excuse my French. It is a glorified EyeToy for crying out loud. Oprah endorsing it is not going to raise the quality. The whole Kinect saga has more to do with a monopolist who think they can buy a market that they missed in the first place. Investors in MS is not going to be very happy about the whole Kinect thing. Lucky for MS the OS and Office devision as always keeps the boat afloat. If MS was a gaming only company they would have been bankrupt long ago.

+ Show (1) more replyLast reply 3272d ago
rich13er3273d ago

They are also getting a cut of the software sales. the 360 has had a pretty good attach rate. I don;t see that changing with the Kinnect.

Greek God3273d ago ShowReplies(1)
Trroy3273d ago (Edited 3273d ago )

I'm a tad worried for the MS Games Division here.

I hear a distant "Nah nah nah nah, nah nah nah nah, hey hey hey..." going on in the background, like I'm at a football game that has gone horribly wrong for the visiting team.

It would suck if investors forced MS out of the games market, because of Kinect failing, when the 360 has done pretty well otherwise, IMO.

Agent-863273d ago

FROM THE ARTICLE: "Kinect is what the future of gaming looks like," says Tony Key, senior vice president of sales and marketing at Ubisoft Entertainment, a games publisher that has announced five games that use Kinect, including a fitness title and a fighting game that go on sale this week. "This motion-sensing controller technology that they've created is absolutely a breakthrough."

I fear for the future of gaming if this ends up being the case.

Bell Boy3273d ago

Indeed let's hope cheap and shoddy games are not the way the industry goes

AceofStaves3273d ago

If Kinect represents the future of gaming, I have no choice but to stay in the past.

Fine by me.

7412103273d ago

did somebody read this part To be successful, Microsoft needs Kinect to help it sell additional game systems as well as reach existing Xbox 360 users. Some 44.6 million of the consoles have been shipped so far. Sony says it has shipped 41.6 million PlayStation 3s, while Nintendo has shipped 75.9 million Wiis. Microsoft executives said they expect to sell about three million Kinect systems over the holiday season. so they did sell 42 million xbox 360 not 45 ps3 catch up

3273d ago
joeorc3273d ago

yup..exactly what it states here by Microsoft's own words:

http://www.microsoft.com/in...

Notice it's talking about Q4th 2010 + at the end of Q1 2011

Key Performance Indicators (in millions, except unit attach rates)

http://www.microsoft.com/in...

the fact that Sony is in it's 3RD Q @ the end of Sony's 2nd Q sony had already shipped 41.6 million LTD Sony's not Listed their 3RD Q shipment's yet!

the fact of the matter is the GAP is 400,000

Remember while Microsft is on its 1st Q of the new Year Sony is still on it's 3rd Q for 2010!

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