Friday, December 10, 2010

Will the Kinect Outsell the Original Xbox

i decided to break posts up into category blogs (personal, politics and video games).  Here is my obligatory first post here.

The boxy black behemoth known as the Xbox allegedly sold in the neighborhood of 25 million units worldwide (and unlike the Xbox 360 didn't like to have hardware failures - aarrgh).  Can the upstart motion controller Kinect sell an equal amount?

The answer may surprise you... maybe.  i decided to not break out the spreadsheet for this one.  Let's break down how i view sales of the unit in the future.  MSFT already expects 5 million unit sales worldwide this calendar year, so let us use that as a base.  2011 will be a key year for Kinect sales (they could even be double my estimate).  i think Kinect is locked into a 4 year + lifespan.  Here are my estimates for Kinect lifetime sales. 

2010 - 5,000,000
2011 - 6,000,000
2012 - 3,000,000
2013 - 1,500,000 (unless the world ends in 2012 - i have my fingers crossed)

Total - 15.5 million units (or 10 million short)

Top questions to be answered:
1) How will the US and UK markets react in 2011 (the US market seems big on sales runs, see Wii)?
2) Will Kinect gain Xbox brand marketshare in non-primary markets?  Will it gain millions more in sales?  How does Kinect function as an Xbox 360 adopter driver?
3) What kind of staying power does Kinect have?
4) When will Xbox Next be released (and will it have Kinect functionality or Kinect 2.0)? 
- If it has Kinect control bundled in, that will hurt individual Kinect sensor sales (make unit sales matter less).  A Kinect 2.0 (especially with backwards compatability) would definitely hurt Kinect 1.0 sales.  My guess is Xbox Next in 2012 or 2013.   
5) What kind of attach rate among current owners (supposedly 47 million or so Xbox 360 sales), what percentage will buy? 
- This is a limiting factor.  Apparently attach is expected to be near 10% at launch - not bad.  i guess 25-35% attach is about a high as MSFT can hope for (with an expanded base). i'm assuming the 360 will probably have 75-85 million or so consoles sold by 2013.  Once again, 2011 could be a massive year for the Xbox brand. 
6) The games: what "new" genres (and old ones) will Kinect revitalize?  Will there be games that cater to the "core" demographic?

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