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If MS is banking on Kinect to be the future of the Xbox platform, then the assumption has to be that a significant percentage of future releases will be Kinect compatible if not required.

The only problem is (if these $189, $120 prices are correct; we'll find out pretty soon), MS just created a split market for a sub-platform that is no longer a casual purchase (like another controller), but a full blown add-on that is essentially a platform on top of a platform ie. Sega CD or Sega 32X. 

At those prices, most Xbox owners will not be upgrading, so I really hope this was a misinterpretation/false information.

If not, those initial games had better be magical.