No demand/no market for product = Industry not ready for it.
Right.
You know, it would have been just as easy to just say it was a proof of concept exercise/tech demo to demonstrate how the technology could potentially be used in future games, but no, "The industry was not ready for it," implying the concept was too far ahead of its time and too high browed for mass consumers, the same consumers who have been buying Kinect, to buy in numbers great enough to be considered commercially successful.
That's a great way of spinning a concept that either had no commercial value, or a concept that eventually would have been exposed as being nothing more than smoke and mirrors to those who were actually hoodwinked into thinking Milo was some sort of interactive super AI "only possible with Kinect."