Without Kinect, I very much doubt that the Xbox One would have been developed as a $299 machine. I think they would have upped the specs and that the end result would have matched or exceeded the PS4's gross potential.
After all, what ended up being one of the 360's major selling points? That it got equal or superior versions of most multi-platform games.
We no longer live in a "cheaper system always wins" world. Moms and dads aren't the only ones making the buying decisions now. As the gaming demographic has gotten older, a 50$ or 100$ difference is not nearly as important as it once was. When gamers are the ones making the purchase, they'll often go for the best over the cheapest.
Microsoft was just swinging for the fences, they would have been far, far better off playing it safe with a $400/$375 console and an optional Kinect add-on. This has been yet another lesson in the gaming industry of when greed for a massive hit wins out over the prospect of steady sales.
They could have had another 360, at the very least, but they sacrificed that in the quest for another Wii.
