That's what I meant all that time, counting move only software to know the install base will never be precise, and so pointless.

I guess we'll see.  I suppose you could chalk up the $500 million in marketing to Kinect alone plus presumerably another $200 to $300 million for R&D and development costs of the hardware and launch titles.

I'd guess, allowing for production/shipping plus retailer cut that if Kinect sells for $150 then MS will see around $30 themselves (that may be optimistic figure though).

So, 3 million Kinect sold would (with the $30 assumption) deliver a return of $90 million.  Of course, SW sold would also deliver additional revenue and then we should allow for a percentage of new Kinect owners getting Live.  Unlike Move, unless things change, it does look like Kinect will be a one time buy with little further incremental hardware opportunity - unlike Move, where someone might buy the bundle then go on to buy another 3 Wands for example.

So it does look like, unless MS are seeing more like $50 dollars a unit sold (which seems unlikely to me, at least for launch, as that would be an very high return ratio on a new device that wasn't from Apple) or the R&D costs were a lot less, that it will take a while for Kinect to pay for it's development and launch costs.

But, I think MS is putting a lot of faith in Kinect finally taking it outside the core demographics that the Xbox consoles have been confined to for so long, and also the device (probably enhanced) taking them from the 360 to their next console.

I wish we had better view on return per unit sold and R&D costs.  Then the picture would be clearer.

Wow, this thread has gone on longer than I thought it would.  And I'm loving the adjustments and the relative quiet that it has brought to the forums.   

@ scat

You can't judge Move's succes based on what Kinect initially sells.  I mean what if Kinect sells more than Move initially, but Move goes on to sell 2 or 3 times as much as Kinect?  Will it still have been a failure?  The point is, however, is that Move can NOT be labeled a failure at all, now.  Its already sold 2.5 mil to retailers, without Japan and all of EMEAA, with some predicting it may sell ~ 4 mil by the end of the year.  The recent adjustments have shown it has boosted the PS3 numbers above all the home consoles since its launch, this week it's even above the DS.  It's already a good-sized success.  And in 2011, we will learn how large Move can grow.

Alas we'll never know for sure, as in its balance sheets, MS puts every R&D cost of any division for things that could be applied also to other divisions, in a separate balance item (together, for example, with legal expenses and a lot other costs, it's explained in a note in MS balance sheets themselves), so the individual costs of any MS division are ALWAYS reported lower than the real ones, MS tries to hid a chunk as large as possible of its costs in the "Corporate Level Activities"  indistinct mishmash.

OOPS! MS calls those costs again "Other" like it used to do many years ago! 

http://www.microsoft.com/investor/reports/ar10/10k_fr_bal.html

And also previous years balance sheets, that had more detailed separated infos for each division than current ones, have been converted to the current format.