What everyone seems to forget is that Microsoft like Sony uses a loss leading model. The 360 started out this generation as a loss leader. Only later due to cost reductions, alternate revenue streams, and frugal price point retention did the consoles hardware became profitable out of the box. Historically speaking Microsoft has no issue with under cutting their manufacturing costs to gain market share. Especially since they turn the corner on losses ridiculously fast. Further more the acquisition of this technology goes beyond the console alone. Microsoft will undoubtedly marry its software prowess with the proprietary technology to make this a standard technology for other products such as televisions, and on the computer side of the equation. So it will probably become a interface boom for the company.
No what is really going to decide the retail price of this product is tried and true supply and demand. Which is how many units Microsoft can bring to market compared to demand. The lower the demand, the lower the price. The higher the demand the higher the price. Say if Microsoft can only bring seven million units to market, and their focus testing shows that the peripheral is going to sell to one in four console owners then regardless of the price they are going to run out of the product. So why voluntarily lose money on the price point. On the other hand if the testing says they will not sell out of the product without a low price then that is what they are going to need to do.
Analytically speaking the price isn't a indicator of a good or bad move on the part of Microsoft. Nintendo basically put a motion control on a slim Gamecube which is thoroughly dated technology with almost no online features, and they were able to sell the console for $250. Nobody today gripes about Nintendo overcharging consumers. There isn't going to be a good or bad move here. What the price is going to tell us is how much demand Microsofts own focus testing has found will be for the peripheral.
There is really going to be a correlation between the price point of the product and the demand. Well unless Microsoft can churn them out which they don't have a good track record of being able to do consistently. Anyway that is why Microsoft is being cagey about the price. No it isn't because it will be bad they are just testing to see what price the market will bare out.
