Is Microsoft’s Kinect strategy a success or a failure?

Website design By BotEap.comThe video game market is currently expanding into many different segments thanks to the Nintendo Wii, as games are no longer targeted at the 13-40 year old male consumer. There’s the market of people over 60 who love to stay active playing Wii bowling or the 30-50 year old who are losing weight using Nintendo peripherals like Wii Fit. Both Sony and Microsoft should applaud Nintendo for expanding a previously narrow market.

Website design By BotEap.comWith Nintendo monopolizing these market segments, Microsoft and Sony have been quick to react. Microsoft introduces a camera that can track your body movements without needing to hold anything in your hand, while Sony follows a similar path to Nintendo by offering motion controllers. So what’s the deal with ‘Kinect’? Who is it for? And how on earth will they compete with the extremely popular Nintendo Wii? This article will aim to answer these questions.

Website design By BotEap.comThere is no doubt that Microsoft is after the casual market. This newly developed market has huge potential and is worth millions to Microsoft. Microsoft revealed the Kinect brand at this year’s E3 and, for the first time, it was broadcast in Times Square for all to see. In addition, they commissioned a show from the exquisite Cirque du Soleil to showcase Kinect which was also broadcast on MTV. These communication channels are not commonly used in the video game industry to showcase new hardware. By broadcasting their E3 press conference live through Time Square, they indicate that they want Kinect to draw the casual gamer into the Xbox experience.

Website design By BotEap.comHowever, is this group right to target? Xbox’s chief marketing officer recently said, “I think we know that the most demanding gamers will be the first to go out and buy it, as with any product.” This statement underscores its intentions to bring Kinect to hardcore gamers, but the problem is that none of the Kinect programs will appeal to them. Casual games like Kinect sports or Kinectimals will never be a selling point for the hardcore gamer. In fact, until Microsoft releases a Kinect game that can get fans excited, they’re likely to hold off on buying. Microsoft built its brand to deliver an intense experience, and it might be unwise to neglect it.

Website design By BotEap.comKinect pricing has become a hot topic of conversation in recent weeks. Although not confirmed, it has been widely considered that the price of Kinect will be around $150. Compared to the Nintendo Wii ($180), the Kinect’s value might seem pretty low. Why would the consumer who currently owns a Nintendo Wii walk away with a significant amount of money to purchase an essential peripheral or very similar product? Microsoft needs to create a value proposition that warrants the $150 price tag, and controller-less gaming could be the answer. Kinect’s unique selling point is the fact that they offer a hands-free way to interact with a game, something the Nintendo Wii and PlayStation Move don’t. Therefore, Microsoft must highlight this advantage when announcing this piece of hardware.

Website design By BotEap.comIn fact, looking at Microsoft’s marketing strategy, you can see why they charge $150. They have to penetrate the market and make the casual market aware of this new product. Microsoft has already spent a large amount marketing Kinect through the Cirque du Soleil show and by displaying Kinect at various Macy’s stores. Do not doubt that they paid an eye of the face to do it. Kinect’s marketability will increase as the release date approaches, and therefore costs will increase. Microsoft will try to recoup this cost and therefore set the price at $150; however, it is doubtful that they will make a profit on each unit sold, as according to ‘Develop’ it costs Microsoft $150 to make the Kinect camera.

Website design By BotEap.comThe casual market is here to stay and is going to grow and grow. Microsoft is entering a market where they are determined to gain significant market share, they are in it for the long haul. Kinect is just the beginning for Microsoft. It is expected to be bundled with Xbox slim when it launches so that Microsoft can bring Kinect to homes around the world. Microsoft will initially want to focus on market share rather than profit, so Kinect’s price is expected to drop and drop rapidly. Kinect or maybe an improved version will be included in the next generation of Xbox console because this will force the consumer to use it.

Website design By BotEap.comConsumers are more likely to see the value in Kinect, and therefore use it, if it is bundled with the console rather than on its own. Microsoft has a great opportunity with Kinect and if sales are slow in the first year, don’t expect Microsoft to abandon Kinect. It’s here to stay, and if they do it right, it could become a huge hit, just like the Nintendo Wii. Microsoft’s number one customer is the hardcore gamer and they shouldn’t be ignored. Nintendo has currently realized its mistake of neglecting its hardcore consumer and has rectified the problem by announcing numerous fan-friendly titles. If Microsoft can maintain that balance, then it could satisfy the stalwarts while becoming a big player in the lucrative informal market.

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