Kinects success presents an interesting challenge to think about in terms of how they price their SKUs. It is likely that the non Kinect SKUs will see a higher percentage price cut than Kinect SKUs. So we could get into a situation where for instance the Xbox 360 Arcade is 25% cheaper and the 250GB with Kinect is only 12.5% cheaper. They'll discriminate between the Kinect and non Kinect buyers like this because Kinect 360s are not directly competing against consoles which offer the exact same experience whereas the regular 360s are.

In terms of pricing:

Xbox 360 Arcade $149, Premium $199, Kinect Arcade $249 and Kinect Premium $299.

is more likely than:

Xbox 360 Arcade $149, Arcade Kinect $199, Premium $249 and Kinect Premium $299.

As they know price cuts aren't as neccessary on the Kinect units as they are on the consoles themselves. Beyond this the Premium at $199 will likely preserve their average sale price and give better margins than the Arcade and with probably still be the more popular of the two. The same would apply to the Kinect Premium with respect to the Kinect Arcade. They'd do this because they can still gather additional margins back from any Kinect-less console sold by selling a Kinect accessory later on.

But look how the Wii did in US over the holidays?  I might be wrong - and happy to be corrected - but wasn't Wii trending right in the direction it was before Kinect?

I mean, I do expect Kinect to slowly have an effect on Wii in US and this will be year to see it, but right now there's so little sign of that.

By the way I'm not knocking anything here, particulary not Kinect which has been an astonishing success and has sold beyond what I freely admit was the ceiling I thought the high price set for it.  I'm just noting how Kinect seems to be a huge success for MS but doesn't seem to have impacted the other consoles much either.

I'm just amazed at how the market seems able to support these consoles and how the 360 and PS3 can continue to cut price, add stuff and get annual boosts and sell masses of the same titles - such as CoD - without seeming to overly dent the other console.

While they all have ups/downs, with the Wii in particular seeming to be on the downward tail of its lifecycle curve, they all seem able to continue with only minimal effects on the other.  Quite amazing really as historically I've always understood this never happens past a certain point of a clear victor emerging.

Of course, I think the clear fragmentation of the global market is playing a part in this.  By region you can see favourites and clearer leaders, but when you add it all up it all seems to balance out.

Hey Selnor - welcome back.  Even though I disagreed with you sometimes I always liked your excitement level!

Look, I live in Europe (and have a 360 kinect). Here kinect doesn't make the 360 sell more, the ps3 is still the more popular console. But when my friends come over at my place and play kinect they are surprised; they like it very much. So I think that kinect makes the xbox brand more famous here in Europe. It won't help the 360 much but it will boost the nextbox for sure!

Maybe I misunderstand you, but the Slim launched in 2009.

So it is down YoY the year after the slim. Right?

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Yeah, but this period is looking at beginning of 2011 to beginnig of 2010 and during early part of 2010 PS3 was still up from the tail of the slim launch.

Now it's down YOY of course.  As we go forward further into 2011 we'll see a clearer view of how it's trending.

360 is up because its comparing against pre-Slim 360 and pre-Kinect sales.

The key point is 360 is up relative to itself and PS3 is down but there is no evidence PS3 is down because 360 is up.  See?  Most people will just assume 360 being up and PS3 being down means 360 is affecting PS3 sales and "winning" but in fact both are selling well they're both just at different points with respect to their last major peak.

It's been awhile since your last post. 

Welcome back who ever you are....

I get it, Kinect is a success. 10 million is a great achievement in so little time...but I'm with psrock on this. There is no need to champion the thing everywhere  you go, which you unfortunately have been in the habit of doing since its release.

Don't fight me on that either, look at your sig prediction. Diskinect.