The only good argument I've seen is product differentiation.
Without Kinect, Xbone is a lower-powered PS4. Why would I want to buy a lower powered PS4 at the same price.
The game library is virtually identical, but not as good looking. MS simply doesn't have the exclusives to really stack up against PS4. This is why a much more expensive PS3 was, over time, able to pass the X360.
Halo and Gears were the only notable exclusives with console selling power. But, Kinect offered a real difference in capability by default. Sure, someone could get the PSEye and have a comparable experience... mostly. But Kinect was 100% there and heavily advertised.
While it would have ruined them, the better option would have been to leave it in and drop the price. Of course that financial solution wasn't possible as there is no way new MS mgmt was going to have Xbox continue as a loss leader. It needs to be profitable and now will be.
So the only other option was to reduce cost of materials so they could drop price and that came at a loss of differentiation. What we have now is only core Xbox people buying it, while everyone who just games will get a PS4.
In my opinion, MS should have stuck to power war, left Kinect out as it was too expensive to keep in, and launched with price parity. It would still have lost to PS4 due to difference in exclusive games, but it would be much closer and probably win NA. As it stands now, PS4 will be top globally and in each territory in the end.







