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I knew Kinect 2 would fail the moment they revealed it still couldn't track the movement of individual finger segments, which meant that from a gameplay perspective it was no better than the original Kinect. In the end, the way it was used could have been replicated by a camera and mic, making the extra cost unjustified.

Microsoft in the end made the mistake that many companies make, they thought the tech alone was enough to get people to buy it, and failed to show what possibilities the tech enabled. If Kinect 2 had been launched with some really good games showing off everything it could do (and persumably something that couldn't be done with Kinect 1), and with evidence of ongoing industry wide support it could have been huge. But it wouldn't be MS if they didn't miss major opportunities.