You have no idea howmuch more advance Kinect is compared to eyetoy.

Watch this... http://www.youtube.com/watch?v=RT7hGBY5FZU

PS eye tech ends at 2 mark...rest is all new to Kinect

This just isn't making sense to me...they're going to have to sell like 20-25 million of these to get even close to breaking even...and I really don't think it will be that big when it costs $149.99 each.

Be kind of embarrasing if both Kinect and Move wind up being a core part of the next generation of gaming...it won't even be new technology.

That's a bit excessive. However they are taking a giant risk, if they fail the shareholders are going to be quite upset.

mike from morgantown came up with a number of 16.67m units of kinect in order to break even on the R&D and the advertising.

This doesn't include cost of developing games, or refinements to the hardware itself, so we'll say 21m units need to be sold.

However, we're also looking at new 360 purchases along with new game purchases, and xbl subscriptions.

say 5m new subscriptions= 250m$
say 6-7m new consoles=300-500m$
say 6 million kinects= 300m$

and oh, 20-25m games= 1B-1.25B$

this totals to about 2-2.5B which is a good chunk of change, roughly the entire tech R&D and advertising budgets.

It's going to be hard to recoup all of that though, looking at it honestly, but putting in 500m in advertising is a good start.

And MS is adapting the same strategy elsewhere (Windows Phone 7, Zune & Bing)

PS. I don't give a crap about MS

Can somebody please define what exactly a success is just so I know 5 years down the road when some are saying it is a success and othres are not.

1.) Is a success based solely on the number of Kinect's sold (including the ones in bundles)...in this case, what is successful in 5 years...10 million, 20 million, more, less?

2.) Is a success based on Microsoft making profit on this...while this is very hard to calculate...lets assume that the total costs associated with R&D and advertising are 2.5 billion (one person said 2 billion for the R&D before, so I'm using that).  At $149.99 per Kinect, they would need to sell 16.67 million million assuming they are profiting $149.99 on each one.  They need to make them though, and I'm pretty sure the 2 billion does not include production and shipping out the consoles.  Lets assume that on average in the next 5 years, they make $50 per Kinect sold (this does not include extra 360's sold, nor does it include additioanl Live subscriptions...however if you do want to count the consoles, it is $50 cheaper to buy it paired, so there is really no additional profit there).  If they make $50 per, they would have to sell 50 million Kinects...that's more Kinects than there are 360's out there right now.  If this is a success, then it will never happen people, sorry.

3.) Or is a success a combination of the previous two options: Good sales, not making a profit, but at least not losing a billion dollars, but rather a number in the 100's of millions of dollars perhaps.  In this case, you are looking at sales of 20-25 million, which I still think is an insane number.

The only real plausible option to make it a "success" would be to look at solely sales, which would mean you need to indicate a number, and I think 10 or 15 million is a good number.

Microsoft is obviously going to lose money on this, but it is about what it might do to help them out in the future.

I think Kinect does really stand a chance at selling 10 or 15 million, but not more than 25 million (much more is needed for a profit when not including additional live subscriptions (which I really don't think would be that substantial).

Not trying to bash, I hope it is a huge success, the thing is sweet, my only concern is that video games are slowly moving away from controller only gaming, which really really scares me.

Such fluctuations are common to the industry, even without the economical crises taken as a factor.

Investors complain all the time, the extrapolation towards failure and MS leaving the gaming business is honestly similar to Wagram's level of bias

Hmm...that's a lot of chips... a lotta eggs in this Kinect basket.

The fact that they are comfortable spending this much makes me sad. Half a billion dollars over promoting a 5-year old console?

I imaging sony pictures is the bulk of the advertisement. And they seem to give SCE the go ahead to make a lot of games and buy lots of studios. Thats more important to me than how much they advertise. Like with this scenario, I'd rather have MS spend 500 million on making games than pimping a shitty new peripheral.