But not for the reasons you're probably thinking!

When was the last time Sony struck it big on a game title and sold over 5M copies outside of GT? How many titles has Microsoft published which have sold in excess of 5M copies outside of Halo? Its not a pretty picture is it? Third parties are good for sustaining momentum, but they can't be expected to ignite it. Even if a third party makes a 5M+ game the chances of it also appearing on the Wii or the other HD system are >70% for simultainious release which means any momentum from third party games will be shared amongst all systems.

So Microsoft/Sony will have to create the momenum themselves. However the chances of this actually happening given their past record is pretty slim and thats with 100% focus on the interface. However they are also distracted by the need to still publish games using the regular controllers which means they cannot assign their best developers to making the games designed solely for their new interfaces which have the best chance of success whilst at the same time Nintendo doesn't face this dillema.

Good points, and barring something crazy happening (this gen, who knows?) this is very likely. I will however, buy Natal and play Minority Report with my dashboard.

That's an excellent point, although my question is: What exactly constitutes failure for these peripherals?

The EyeToy shifted around 10 million units without a real killer app (of course, it was selling to the PS2 install base, so it had that going for it).

MS and Sony seem more dedicated to these new motion controllers, so wouldn't an install base of 10 million for Move or Natal be pretty good? Or do these controllers need to drive sales with a monumental 30% attach ratio like the balance board to be considered a success?

I don't think I'll get one. As far as I can see its a gimmick and won't be a satisfactory way of playing games.

I got bored of Wii sports inside 10 mins and I don't expect these systems to be much different.

All I know is at first I thought the title said "Move and Natal will FLAIL as gaming interfaces." and I thought "yup".

Given the level of investment I would consider 25-30% attach rate as the floor of where they start being considered successful. They would have to be looking at between 30 and 70% attach rate as the realistic range of support for the interface from consumers. Anything less than that is likely a very negative rate of return for their time/money and a setback in terms of moving into the next generation as it raises questions from third parties about whether its worthwhile supporting them and it would kill consumer confidence.

I would say they'd need closer to 15M units because any third party targetting the interface would only be able to get a subset of the market. In a way I think of the new interface equiped consoles as a subset of the whole and a unique console to itself. I believe people ought to think of the interface as their own console within a console and give it the same considerations about userbase size relative to support that they gave consoles like the PS3/Wii/Xbox 360 with original equipment.

This is pretty much one of the early problems; the killer app.
I remember when TheSource was discussing Wii Sports Resort, he mentioned that once it passed 7 million, its sales would reach a 'critical mass'. Once that mass is exceeded it hits system seller status (if not a system seller already).

Another problem is how viable Natal/Move will be to support. Nintendo already popped things off with their 3DS thing, and usually (unless it isn't as big of a leap as we suspect) a console usually comes a 7-13 months afterwards.

Natal and Move are coming in November correct? Will they surpass 7 million by then on either console after a year? That would call for attach rates quite a bit larger than 10%.

Okay, if you're setting the bar at Wii Fit or better, then yeah, they're definitely going to fail.

I have to set the bar that high because they simply will not get continued support otherwise. 3rd parties are offering support now because they believe they might have a chance to succeed, however if they become failures then 3rd parties will begin to expect a new generation of consoles to appear shortly (2-3 years at most) and they will start to pull support from both consoles and begin preparations for the next generation of consoles. This means we won't see many of the AAA developers for another 3-4 years as they make yet another transition. The success or failure of these interfaces also has considerable bearing on the standard level of support these consoles will get. 

I forgot to mention that Natal can fail as a gaming interface somewhat but still find some success as an interface in general. The concept of a hands free interface works well with the various video/music on demand services Microsoft has formed partnerships with. Netflix, that French place, Sky, LiveFM, ESPN and rumoured Hulu support which is possible given they specifically blocked the PS3 from access not too long ago alongside their own Zune marketplace.

This is true. In order to sell as gaming interfaces, they need a killer app. which uses the unique functionality of each tech.

As multimedia devices, there are numerous possibilities.