Smart move in the short run, at least. Coming in at a hundred dollars less than the competition is a real advantage. Time will tell how it pans out in the long run; Microsoft needs to convince people that controlling your UI through motion and voice is super cool, and the future of entertainment. I don't think it will be easy, but if they can do that, Sony might regret not bundling the camera with the PS4.
Right now, people (namely hardcore gamers) are skeptical of how useful a camera can be in the gaming/entertainment experience, and understandably so. It's a cool idea, but many people will need hands-on to have a chance at being fully convinced, and while the Kinect 1.0 showed the potential of the camera, it lacked the tech to really win over a wide swath of the gaming audience. From what I've seen of the new Kinect so far, I think it might be able to do just that, but we will see...
