Price is right and wrong for Xbox Kinect

Microsoft has announced a mixed bag of pricing for its Kinect motion controller and a new version of its Xbox 360.

The low $200 price for a 4-gigabyte version of the Xbox 360 S coming in August may give Microsoft an advantage over Sony and Nintendo in new console sales, but existing Xbox owners may baulk at paying an extra $150 for a Kinect sensor, available from November 4.

The Xbox 360 S was introduced at the E3 video game trade show in June and the quieter, shiny-black, slimmed-down version of the console has been selling well since.

Sales of 452,000 units in the US in June were 88 per cent higher than a year earlier and more than double the 195,000 sold in May.

The 360 S sells for $300 with 250Gb of storage, but the new version with only 4Gb will appeal at $100 cheaper and still having features such as built-in Wi-Fi..

Buyers new to consoles will like the price and have enough storage to play arcade games and demos, while even expert gamers may be attracted knowing they can add external storage through the USB ports.

So the new Xbox compares well with the $300 Sony PlayStation 3 and $200 Wii.

Microsoft has been giving us a slow drip of information on its new motion-sensing controller since showing it for the first time as Project Natal at E3 last year.

At E3 this year, we learned its real name – Kinect – and saw some of the games that will be available at launch.

Today, we officially learned the price – $150 (€150 in Europe, £130 in the UK]. However, this is no surprise as the Xbox online store has had this as the suggested price for some time. We still don’t officially know the launch date – although Amazon saying it will be released on November 4 on its site is a bit of a giveaway.

The Kinect sensor does include the Kinect Adventures package of games, but analysts at Wedbush Morgan Securities believe the games are not compelling enough to persuade hard-core gamers to pay more than $100 for the device. They think that “pricing at the higher point would severely limit sales”.

The best value is in a bundle announced combining the new Xbox 360 4Gb with the Kinect and Kinect Adventures for $300 (€300, £250), effectively pricing the Kinect at $100.

“For a two-player Sony Move experience with a PlayStation 3 console, we’re confident we’ll be €150 cheaper [with the bundle],” Chris Lewis, head of Xbox in Europe, told me as part-explanation for the pricing strategy.

Xbox will have 15 games at launch for Kinect priced at around $50 (€50), including three titles from its own studios.

The novelty of Kinect may persuade some gamers to pay $150 to add it to existing consoles, while others may wait for a price drop. Meanwhile, the bundle announcement may put a drag on sales of new consoles – the 4Gb version is available on August 3 in the US, August 20 in Europe, but buyers may be prepared to wait till November to take advantage of the Kinect deal.

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Richard Waters, Chris Nuttall and April Dembosky in the FT's San Francisco bureau share their views - plus tech insights from Tim Bradshaw and Maija Palmer in London and Robin Kwong in Taipei.



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