It's actually on track to do 6.5 mill, that's if it doesn't shown ANY growth over the next 3 weeks (not 4)

For the record, that $500 mil is for the year, not for the holiday.  Its also not an unusual marketing number.

Also, I think we may just have different views of what is a game changer.  As the article states, alone it looks to generate some $2 bil in revenue.  People are having a blast with it, developers are excited to do cool and unique things with it, hackers are already getting creative with it and its been out for a little over a month.  

While I agree that I can't predict the future, but I guess its getting old to hear people fighting the trend.  Back in 2009, Project Natal excited the world with its potential.  Throughout 2010, it was highly anticipated and launch sales were predicted to be quite impressive.  So it launches and sells even BETTER than anticipated and demand continues through the holidays.  For people to believe and promote the possibility that demand will disappear after the holidays and this will be a 2 month fad, despite industry professionals and analysts clearly saying the opposite, gets a bit irritating here on this of all sites.  

Kinect is trending very, very well and there are no signs AT ALL that it will slow down signficantly, so why even dwell so much on something that is so unlikely?  I just don't understand ...

Ah hah, it's not dwelling they're doing rubbing hands with glee more like

$500m is for the product launch,altough not jst for holidays itself,it is just for launch still.we don't know if its an yea or not.even then its big and the fact that MS will drop most of that on US itself,so you have a big marketing and that too just for few countries(i am saying this based upon the xbox strongholds like US,UK)

don't get me wrong.i am not saying that people aren't enjoying,devs aren't interested and hackers aren't doing amazing stuff.they are and i fully believe that.

about sales,i didn't mean to say it will vanish after holidays.i didn't say anything about how it will perform.I am just saying that after one year we will know how it effected at different periods of year and how sales increased and decreased.thats all.

game changer atleast when discussing in gaming terms and sales term would be that kinect is so big a hit that 360 HW sales increase throughout the year and defeat the competitors(yearly from now on) and become the new definition like Wii did which we will find out in an year.i didn't know you were talking game changer in utility terms.

It's for up to 2012. And it's less than Sony or Nintendo have spent this year on advertising their consoles (Kowen found proof, not sure which one) so it isn't actually all that much.

The revenue breakdown must go somewhat similar to the following

Per unit kinect

Better material attach rate for the 45 million Xbox installed base $150

Higher adoption and market share gain for the console itself Assuming 20% of those buying Kinect are new owners $300 * 0.2 = 60

An uptick from the sale of new titles = $40 * 5 ($40 average game price and 5 games per kinect) = 200

Lower attrition and higher gross new subscriber growth for Xbox Live users let say kinect keeps half its install base on Live for one year longer, which is $60 per year afaik so that's $30.

So each kinect nets a total of $440 revenue.

$2 billion / $440 = 4.55 million unit sales.

Well, unless my maths is wrong anywhere, then I think the only conlusion I can draw is that these people are talking about this year only, they started with the 5 million sales figure and worked out how much people would be spending on each one to get 2 billion

It's vauge I agree, Kinect drove up 50% new purchasers in Nov NPD though.

Yup, I thought it would be damned hard for Kinect to sell 5 million. I mean 5 million is a huge number to sell for something that costs that much. But I sure is liking what I see. Ms went out on a limb with this one and Im glad they are benefiting from it.

Yeah, when I originally wrote the post I was doing all my approximations on the assumption that this was end of life predictions, when that turned out not to be feasible I should have changed things.

If we're taking your 50% figure instead other 20% I pulled out my arse we get an extra $90 per console. However, my estimate of 5 non bundled games per kinect looks a bit silly if we're simply talking about 2010 calendar year revenue. Drop it to two $40 games and we get 4.9 million units of kinect sold, so I still feel confident that they are talking 2010

Not quite right - just as an FYI.  What Kow was talking about is that Sony in total is spending more on advertising than MS in total - which is quite true.  Sony is a mostly consumer facing company and spends a fortune in total advertising - a huge amount of which at the moment is being spent on TV/3D.  MS overall remains more business centric, where advertising is less, with their consumer advertising spend being less than Sony overall.

From what I've seen, specific to consoles, the additional promotional spend for Kinect almost certainly means MS is spending more (but not hugely more) on 360/Kinect than Sony on PS3/Move (or Nintendo as I read their releases).

But I agree in principle, people are taking the $500 million all wrong.  It's almost certainly an annual budget (and global too no doubt) and given the importance of Kinect to 360 its well in line with what Sony are spending on TV/3D (as well as PS3/Move) because that's important to them.

From the initial signs Kinect is certainly going to drive a lot of revenue - more than I admit I thought.  This is more through the device itself than SW at the moment, but that should balance out as more titles are released.

With Wii managing to spike again, Kinect going strong, and even Move showing decent sales (if more EMEAA centric) it looks like motion control and family/friends gaming in various forms remains a very profitable market next to the more traditional genres.