There are a lot of people that finds Kinect price very expensive....well, it's almost a webcam, isn't it? It really is expensive? YES, IT IS! And Microsoft thinks you will buy nevertheless.

When I think about the profit that MS got with $150, it's very worth to take the risk. I think that what they are trying to do is:

(1)-Build a decent lunch line-up. I think that they are already giving incentives to Devs like free marketing. That is essential for (2).

(2)-Offer Cheap 360+Kinect bundle. That will not only attract new users for 360, but it will increase Kinect user base. New users don't care what the price of Kinect is  in the shelves, but only for how much he is getting at the bundle.

The number one must be the main reasons of Kinect--> New Xbox users.

(3)-What is the need to offer Kinect to existing users at a loss or a barely profit? What they will gain with more kinect sold? The motion control fanboy war? If (2) works right, there will be a good userbase after holydays, and that will give incentive to Devs to make even more games. The value of the product will increase and the $150 will be justificable for most users.

(4)-????

(5)-Profit!

(6)-Microsoft probably will make NexBox compatible with Kinect. They need to maintain the Kinect value very high and continue to sell at high price(see Wii), that would retain users, make them buy nexbox instead of ps4.

Ps.: Not every consumer will follow these "rules". A few consumers will buy x360 withouth Kinect(but they are potential consumers in future) and a lot of current users will buy kinect on lunch, or even upgrade to 360s(both will give good profit for MS).

This is like a Ecosystem. They need to build a value on kinect, this is a fact. The problem is, they are gonna be able to make "hardcore" current users buy this thing? Well, they are the ones that buys things at a high price, so price is not a problem, the problem is if MS can actually make worth games to these people.

Maybe Microsoft is seeing the current users as a "bonus" and chance to profit. They are actually making the INVERSE strategy of Sony.

RESUME:

Microsoft-->Profit a little for bring Xbox to new homes and increase Kinect userbase and value by these new owners. Profit a lot from existing users.

Sony--->Sell Move to existing owners at a little profit. Increase Move userbase and value by these current owners. Profit for bring new PS3 users and make the value of Move stronger with these new users.

My Opinion:

Sony has a balanced strategy that probably will give them a nice profit. Microsoft has a strange strategy but IMO have high chance to make right. If it fails, that will still make some profit(it's already confirmed that kinect will sell a few millions). If it wins, that will give enormous profits that will most likely maintain x360 in the second place, and make a massive x720(lol) Lunch.

Your Opinion:

Please post Yours!!

One problem with Kinect, only two games actually work/control decently and their in the genres and target audience wii dominates, I think MS is going to have a lot of sales on launch, a few sales from bundles with people who don't know any better and then nothing, as for the move it all depends on how much the devs get behind it, Sorcery looks great, and alot of games have the option for it, but having the option isn't going to sell it, it will make people more likely to buy with less exclusive games for it, so yea move depends on all the games, kinect depends on the stupidity of consumers who don't already own a wii, if it was just the first part they'd probably do pretty good but everyone who might be interested already has a wii and won't want to buy kinect 

Well at this point, it is obvious that MS has decided to harvest the holiday sales.  The early leaks and pre-orders with the unofficial price were test marketing.  MS must have seen that they will be supply constrained or close to it at $150.  So they will price discriminate for the early adopters of the stand alone. 

The bundle isn't that bad of a price, effectively $100 for Kinect game and definitely within reach for new consumers in the holiday period.  More interest is when will they price cut, both kinect and the arcarde as well as the bundle. 

My opinion?

Considerring the tech in Kinect (Lots of hi-tech stuff in Kinect whether it works fully or is seen as a glorified webcam) I'm not suprised by the price for 360 users to jump in. I reckon they'll probably break even on the current Kinect price and obviously make some profit on the games. MS/360 fans are pretty rabid so I think MS believes they'll buy it at this price point.

New users are who MS are going over to try and expand there user base by introducing a $300 360s Kinect. This they may be making a loss on (although a minor one) as they desperately try to bring the casual market the Wii has opened up. In both I think MS will do well this holiday season. The crunch factor will be whether the technical problems are true and if the consumer cares. If they're bad and annoys consumers, Kinect could fail long-term due to negative word of mouth.

Sony seem to be of the opposite opinion and look to be selling to current users as you said. I think they may be of the view that PS3 Move is too expensive to bring in casuals.

Problem with both MS and Sony is that I'm not seeing enough branching software. All of Kinet's software is casual and most of Move's lineup is core. There's nothing in-between which is what the Wii had.

kinect will sell what ever they do, i dont think if it is going to work with the casuals like it did with the wii, but current 360 owners will, they buy everything, live a new 360, when people get to 5 360s and still dont care then 150$ for an advanced ps eye isnt much.

What do you consider in-between. The shoot could be casual and core. I don't know if you would consider The Fight to be in-between. Sports Champions could be casual and hardcore with that Frisbee game, or the gladiator games.

Well this kind of reminds me old days when people were asking why Sony is making Ps3 with such huge loss...Well price came from 700€ to 300€ so Kinect will become much cheaper later on.

But I don't see how it will success on casual market...150$ is pretty much on that market.

The only games in general that come between casual and core that I can think of is LBP (and well pretty much any 2ed platformer), Batman AA I guess is inbetween and rachet and clank games

Games like NSMB, Mario Kart, Smash Bros., and to a lesser extent Mario Galaxy, Zelda and Wii Sports (% Resort). These tend to bring in core gamers whilst appealing to the casual market or vice versa. I think with regards to release software (so far) Kinect leans too much to the casual side whilst Move leans overly to the core.

It's not how much the kinect cost. The casuals don't care how much x350 kinect cost, and it's only a little more expensive than Wii and have virtual reality(even if doesn't work, this don't matter for them).