I agree. I'd just add that thanks to its free body feature, Natal could struggle in some genres, but it could also carve for itself two potentially big niches with fitness and dance games.

Look, if they put a price tag for 150$+ it's because they know it is going to sell a lot of units. If they set the price tag at around 50-75$ it's because they don't think it will sell very much, and between those two price points I'm not really sure.
But it's all a gradation.
MS is in this for profit. What you guys need to understand is that prices aren't set in order to promote sales. Predicted sales set what the price will be.
You're all (most of you) looking at it backwards.

Not only for profit, if in the past it wanted to crush Sony, now that it failed at that, maybe it's realizing that the longer this gen lasts, the later competitors will  grab a share of living room PC market with next gen consoles, as it's clear that current gen is lacking in key components, like RAM amount, for that purpose. MS now knows it can't kill the ghost that's scaring it so much, but it can do as much as possible to keep it away some more time.

I can see the casual crowd buying the 100$ camera thinking it will work just like that with no need of anything else.

All of this information (see below for details) points to the fact that Natal will be $100 USD/ 100 euro.

It also is going to be more family fun fare than serious gaming.

The price point and competition are going to make it a tough sell.

Ironically, this is what everyone said -- except for Patcher -- when Natal was first announced.


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The translation from Xbox360 France:

http://translate.google.co.uk/translate?u=http://www.xbox360france.com/news-nouveau-prix-pour-natal-nv9774.html&sl=fr&tl=en&hl=&ie=UTF-8

New prices for Natal
Published by The Joker Thursday, February 25, 2010, 13:03

Here's some news that will not rob players of Xbox 360. In fact, Erin Hofto is the Product Manager at Microsoft has been questioned in relation to the Draft Natal who must make his arrival on our consoles by the end of the year. Many rumors have circulated about the fact that the camera would come out at a price of about $ 50. Erin then denied all these rumors and said that unfortunately the price rather turn between 100 and 200 euros. This is not at all the same and the price becomes much less affordable.

Erin Hofto we also announced that the new camera will work on all models of consoles and there will need no update.

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There are several interviews with Erin Hofto on Project Natal

In another she talks about the game choices -- casual fare.

According to Microsoft, the first games released for Xbox 360 add-on Natal will be anything but "Core." At a press event and Natal demo last night in Europe, Erin Hofto, Xbox 360 product manager showed off a tech demo for the system and said, “What you see here is just the beginning, this game is about 12 months old, but we do see the first titles for being very similar in design: fun, simple and family orientated."

Read more: http://g4tv.com/thefeed/blog/post/702816/First-Wave-of-Natal-Games-Fun-Simple-And-Family-Oriented.html#ixzz0h2I2NXkS

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Mike from Morgantown

Actually, I doubt they really care much about crushing Sony, they care much more about profits. If they could do more profits with collaboration with Sony they would do gladly do it. Just like Sony would do collaboration with MS. They only crush their competitors because usually it gets them more profits.

Remember, Sony uses Windows just like most PC manufacturers and PS3 has codecs made by MS. Even Blu Ray standard has some codecs made by MS. And PS3 Cell prosessors are made by Toshiba because Sony sold all their PS3 Cell factories to Toshiba. Yes, all CPU's in PS3 are made by Toshiba, not Sony. So, to them, even HD DVD vs Blu Ray fight had no meaning in business relationships.

Actually both Sony and MS have almost made a virtue of selling at cost or a loss to achieve something.  There is no way, unless my understanding of the market, that Natal can launch at $150 dollars.  If it did that would kill it right away IMHO.  That means that, unless MS drop the actual console price, existing owners need to pay $150 to get Natal - that isn't going to have too many takers IMO.  Also, that would mean to get a 360 and Natal you'd be looking at the current 360 price plus $150 for Natal vs current Wii cost - again, I really don't see that working too well.

Many companies get launch prices wrong or have to adjust because their initial view of price elasticity - the relationship between a price and demand, is wrong.  Also quite often prices are set to promote sales - particularly if you're trying to generate demand for something when you're behind in the market.

I might be wrong, and I'll happily eat crow if I am, but I really doubt MS see themselves in the driving seat here.  Wii already has a much bigger install base in less time than 360 and they need Natal to be a success after this much hype or they're going to have a lot of egg on their face - I really don't think MS is in a position to demand a lot of money for an unproven peripheral at this point.

So you're not convincing me I've got it backwards I'm afraid.  I'm still pretty sure I'm right.

They stopped mainly because after release they saw PS3 has enough shortcomings to prevent it from doing what they feared, and now they see that while they were busy fighting Sony, Nintendo quietly grew enough to become a possibly greater threat, but they are lucky, as Nintendo cares only for games. The threat is still there, as living room PC's are still not widespread, so legacy is weak and office tasks play a little role for them, so just like it already happens now on a very small scale, a device without either Windows or any other MS SW could perfectly do, even more if it's a console, able to play a vast library of games and so removing a possible weakness of devices without Windows.

PS3 uses, more than MS codecs, some MS formats that MS released for free to help them become industry standards, like VC-1. MS earns money from its codecs, but their use isn't mandatory, despite being the most used for their formats, and the revenue produced is a very tiny fraction of the one from Windows and Office.

Anyhow you are right that neither of them is afraid of doing business with the other each time they see it fit, 90% of PC's is required with Windows, so Sony is happy to buy it and MS to sell it, but when MS sees anything that could potentially prevent it from putting Windows in whatever it can, Ballmer gets (more) mad.

For Natal at least, the performance in games isn't the only hook for adoption. Microsoft has a significant leverage as well as a media interface because they have already got Last. FM, Netflix, Sky, some French place, and are getting ESPN, as well as their own Zune stuff and perhaps even more than that as streaming services. Also the NXE for the Xbox 360 is designed to be able to be navigated with a gesture interface. In addition to this, if they can get the Xbox 360 bundled with certain TV models it'd help increase their overall userbase quite smartly.

Postage and handling + the cable itself doesn't sound like a profit centre at $15 for them.

Sony didn't ship me a coffin when my PS3 broke down, thats pretty standard.

The HDD is in an external enclosure and I believe they have to pay a royalty to Nvidia for every one to enable backwards compatibility. I see similar drives for $70 from Newegg so it doesn't seem that bad considering extra margins for retailers and Microsoft are the norm for peripherals. Its not like most of us haven't paid too much for an 8MB memory card at some point, so its a normal console phenomenom.

As for the wireless adapter, its a dual band N USB adapter for $87 on Newegg. The closest single band was $43 so its not a significant additional cost IMO.