Passing on Kinect would've been a bad move if it helped microsoft long term but it seems it only helped for the holiday season and first 1-3 months of this year. Looking at his beautiful chart you can see
http://www.vgchartz.com/weekly.php
That kinect is being outsold by wii fit and just dance 2
It used to be big like this
http://www.vgchartz.com/weekly.php?date=40685®=World&date=40580
The only way its a mistake is if you look short term and only look at the holiday season and America sales. It did little in Europe and nothing in Japan