Ironic because MS has much more money and can survive a war of attrition over Sony.

But on topic, MS seems to be securing the bigger name games so far. Forza 5 and Dead Rising 3 combined outshine Killzone and Titanfall made a bigger splash then Infamous. This holiday we shall see but Sunset Overdrive allready is gaining buzz. Project Spark, Quantum Break, Halo 2 Anniversary, rumored Forza Horizon. X1 is off to a great start with big name games.

Actually those who have Kinect arguably still have the best version. Kinect is at the end of the day, a convienence device. Voice commanding the marketplace, TV, music, video, social games, and video chat via skype. All made seamless with the snap feature. Whether they want to embrace the convienence is up to them.

Why exactly did the Kinect need to be removed to drop the price?

Because Kinect costs money so by removing it the price can be brought down? What you playing at since this is pretty straightforward?

The 499$ bundled Kinect passed the price onto consumers. You mean to tell me that MS could not afford to pay for the Kinect? The same device they claimed to be essential to the device was the first thing to go when they reduced the price?

And spent Millions on in R&D?

Sorry, I don't fucking buy it.

Just because they can afford to take a hit, doesn't mean they should. They want to keep the Xbox division in the black, not take it back to its red ink days, despite them having billions to pad the losses. It is about being sustainable, not being reckless.

The only good argument I've seen is product differentiation.

Without Kinect, Xbone is a lower-powered PS4. Why would I want to buy a lower powered PS4 at the same price.

The game library is virtually identical, but not as good looking. MS simply doesn't have the exclusives to really stack up against PS4. This is why a much more expensive PS3 was, over time, able to pass the X360.

Halo and Gears were the only notable exclusives with console selling power. But, Kinect offered a real difference in capability by default. Sure, someone could get the PSEye and have a comparable experience... mostly. But Kinect was 100% there and heavily advertised.

While it would have ruined them, the better option would have been to leave it in and drop the price. Of course that financial solution wasn't possible as there is no way new MS mgmt was going to have Xbox continue as a loss leader. It needs to be profitable and now will be.

So the only other option was to reduce cost of materials so they could drop price and that came at a loss of differentiation. What we have now is only core Xbox people buying it, while everyone who just games will get a PS4.

In my opinion, MS should have stuck to power war, left Kinect out as it was too expensive to keep in, and launched with price parity. It would still have lost to PS4 due to difference in exclusive games, but it would be much closer and probably win NA. As it stands now, PS4 will be top globally and in each territory in the end.

With the Kinect bundled at 399, assuming the Kinect is 75$ (IHS), MS would have to sell 13 million of these SKUs before incuring 1 billion in losses.

50 million SKUs would only be 3 billion in losses, and by that point manufacturing prices would drop significantly.

Considering the fact that the XB1 is first place in software sales, why couldn't that 75$ loss per console easily be made up in the sale of 2-3 games?

Its not only affordable, but easily sustainable especially for MS.

You're the one that made the point about MS throwing their money around to win in a war of attrition, and yet giving away the Kinect is one of the cheapest ways to secure a true advantage against the PS4. Now its simply a matter of preference, doesn't matter how advanced the Kinect 2.0 is when the competition has something that can do the same thing and both are optional anyway.

Funny thing. My sister came over on Monday and asked "What new thing do you have"? I took her and showed her the Kinect on Xbox One. I don't know what the fuck happened. Virtually none of the voice commands worked! Crazy since it worked almost flawlessly before. I was looking like an idiot yelling "Xbox, On" (before finally using the controller), "Xbox, Watch TV", "Xbox, what's on Nickelodeon". So embarrassing.....I guess it was shy. Now, it works again.

Yeah it's just an option now, it's not like the Kinect bundle is going away, or that MS cannot more aggressively price it down the road.