Their vision for XB1 has put them between a rock and a hard place.
MS wants to be in the living room and get you to watch tv and use skype through their pay wall and make a percentage of all your online spending. For that is has to be easy to use and stand out from the dozens of other devices that do so without a paywall. They have banked on Kinect for that.
Selling a kinect less sku to gain momentum is not going to help their goal. The casuals they want to reach will buy the cheaper version and use their smart tvs or other devices instead.
It's clear selling a great games machine is not the priority, all efforts are mostly concentrated on the US and UK where they have the most video services and highest live gold adoption rate. The existence of the hdmi in port is purely for the tv watching casuals to ease the transition to watching tv over the internet.
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