I think what he is trying to say is the $50 discount you get on the bundle relative to the full price console plus stand alone kinect could have come from the marketing budget. I know this happens with mail in rebates and other promotional deals (e.g. buy an XBox between now and Jan 16 and get a free arcade game). The reason I do not think the Kinect console bundles cost differences are coming from marketing budgets is this appears to be permanent, not a short term campaign related pricing. 

Well considering Kinect appeared on some of the biggest talk shows in America, was advertised every 15 minutes on nearly every TV station I watch and MS had stalls set up in stores showcasing kinect all across America. I'm pretty sure that 500 mil marketing Campaign was for the launch alone. I mean I bet at least 20 million was payed out to get kinect on the oprah winfrey show cause that show pulls in an estimated 42 million views a week in America alone.

Well i expect that counts for international marketing as well. here in the UK i read a newspaper around the time of November and on every other page was an advertisment for Kinect, not to mention live demonstrations in big stores, like supermarkets and possibly shopping centres. but i think thats the amount they spent just for the launch because Kinect has been everywhere and the campagain has been global, not just in America.

The $500 million is already spent.  It went into subsidizing the bundle, 400 million cans of Pepsi and Diet Pepsi, 60 million  Kelloggs ceral and snack boxes, major Burger King promotion, Youtube main page Kinect themed takeover, ad placements on TV, video, web, magazines, billboards, online video promotions, a major Times Square promotion, hundreds of fully staffed Kinect kiosks at Macy's and many malls, plus spots on The Oprah Show and Ellen.

All that stuff gets paid for ahead of time.

Considering Halo 3 only had like 40 million budget or so i would still say no. Its for more than this holiday only.

Halo was being marketed to an audience which both knew what Halo was and mostly was interested in it. Kinect was being marketed to an audience which hadn't a clue what it was and was completely disinterested in it. I hope you can see how the former might be cheaper than the latter.

Finally, they probably gave similar to Halo marketing budgets for several of the top Kinect titles. You can eat through more than a hundred million if you're spending Halo levels on 3 to 5 games each.

Actually, Halo 3 was much closer to $100 million with some reports saying $200 million.

Modern Warfare 2 was $150 million.

A $40 million marketing budget was Wii Fit.  And by comparison, Kinect, Halo 3 and MW2 had far bigger marketing campaigns.

i bet some went to the gadget show to put it on the #1 christmas present list.

Waitaminute ..... was the 360 advertised this holiday OUTSIDE OF Kinect?  Sure, there were individual games that had the logo at the end, but I'm talking about the console.  Wouldn't that make the $500 mil comparable to whatever Nintendo and Sony spent to market their platforms for the whole holiday?

Anyway, MS spent it and we see their sales numbers.  Sony didn't and we see their sales numbers.  So was it worth it?  When the financials come out, I'm fairly confident that MS will show a larger profit from the division that houses their gaming endeavors.