Natal's problems are two fold as far as i can see.
1. Software
2. Price
If you are a MS developer what is your motivation for programming Natal support into your new game? As we have seen with the Wii, most of the best games are those that were built from the ground up with the Wii controller in mind. As a third party are you going to start developing a game now that is exclusively designed for Natal or if you have dual controller support are you really going to make the most effective use of Natal? If you decide on exclusive support, who are you going selling your game to because Natal currently has an installed base of 0.
I just feel Microsoft lacks the ability to marry this admittedly exciting technology with must buy software in an affordable package. I just can't see Microsoft producing a piece of software that makes Natal must have, in the way that Wii Fit did for the balance board. And you would need that kind of Natal install base to make it a viable target for games designed specifically around Natal . Regarding price, if Natal was cheap ala WM+ they could just bundle one with every Natal game that initially released providing a rapid boost to the install base but current information suggests it's unlikely to be that cheap.
Given the huge difference in the nature of traditional Xbox360 controls with Nadal i fear we are going to see a mess of games with traditional controller support that shoehorn Natal controls into the game resulting in software reminiscent of but perhaps even worse the some of the Wii's first offerings. In the end i can't see Natal being sold in high enough numbers to make it a viable target for games designed specifically to take advantage of the unique control opportunities it offers.
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