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Is Microsoft’s Kinect Strategy A Success Or A Failure?

The video game market is currently expanding into many different segments thanks to the Nintendo Wii, the games are no longer aimed at the 13- to 40-year-old male consumer. There is the market for the over 60s who love to be active playing Wii bowling or the 30-50 range who are losing weight using Nintendo peripherals like Wii Fit. Both Sony and Microsoft should applaud Nintendo for expanding a previously narrow market.

With Nintendo monopolizing these market segments, Microsoft and Sony have reacted quickly. Microsoft is introducing a camera that can track your body movements without the need to hold anything in your hand, while Sony is following a similar path to Nintendo by offering motion controllers. So what’s the deal with ‘Kinect’? Who is it for? And how on earth will they compete with the extremely popular Nintendo Wii? This article will aim to answer these questions.

There is no doubt that Microsoft seeks the casual market. This newly developed market has enormous potential and is worth millions to Microsoft. Microsoft unveiled the Kinect brand at E3 this year and, for the first time, it aired in Times Square for all to see. In addition, they commissioned a show from the exquisite Cirque du Soleil to show from Kinect that was also broadcast on MTV. These communication channels are not commonly used in the video game industry to showcase new hardware. By broadcasting their E3 press conference live via time square, they indicate that they want the Kinect to draw the casual gamer into the Xbox experience.

However, is this the right group to target? The Xbox marketing manager recently said “I think we know that hardcore gamers will be the first to go out and buy it, as they are with any product.” This statement underscores their intentions to bring Kinect to the hardcore gamer, but the thing is, none of the Kinect programs will appeal to them. Casual games like Kinect Sports or Kinectimals will never be a system vendor for hardcore gamers. In fact, until Microsoft releases a Kinect game that fans can get excited about, they’re likely to keep buying. Microsoft built its brand to deliver an intense experience and it might be unwise to neglect them.

The price of the Kinect has become a hot topic of conversation in recent weeks. Although it has not been confirmed, it has been widely considered that the price of the Kinect will be around $ 150. Compared to the Nintendo Wii ($ 180), the Kinect’s value might seem very low. Why would the consumer who currently owns a Nintendo Wii walk away with a significant amount of money to purchase an essential peripheral, a very similar product? Microsoft needs to create a value proposition that guarantees the price of $ 150 and controllerless games could be the answer. The unique selling point of Kinect is the fact that they offer a way to interact with a game without the need to have anything in your hands, this is something that the Nintendo Wii and PlayStation Move do not offer. Therefore, Microsoft should highlight this advantage when announcing this piece of hardware.

In fact, by looking at Microsoft’s marketing strategy, you could see why they are charging $ 150. They have to penetrate the market and get the informal market to notice this new product. Microsoft has already spent a great deal to market the Kinect through the Cirque du Soleil show and by displaying the Kinect in various Macy stores. There is no doubt that they paid through the nose to do it. Kinect marketing is projected to increase as the launch date approaches and therefore costs will increase. Microsoft will attempt to recoup this cost and therefore price as high as $ 150, however it is doubtful that they will make a profit on each unit sold as according to ‘Develop’ it is costing Microsoft $ 150 to make the Kinect camera.

The informal market is here to stay and will grow and grow. Microsoft is entering a market where they are determined to gain significant market share, they are determined in the long run. Kinect is just the beginning for Microsoft. It is expected to be bundled with the Xbox Slim when it launches for Microsoft to bring the Kinect to homes around the world. Microsoft will initially want to focus on market share rather than profit, therefore expect the Kinect price to drop and decline rapidly. Kinect or maybe an improved version will be included in the next generation of the Xbox console because this will force the consumer to use it.

Consumers are more likely to see the value of the Kinect and therefore use it if it is bundled with the console rather than on its own. Microsoft has a great opportunity with Kinect and if sales are slow in the first year, don’t expect Microsoft to drop Kinect. It’s here to stay, and if you get it right, it could become a huge hit just like the Nintendo Wii. Microsoft’s core customer is the hardcore gamer and you shouldn’t ignore it. Nintendo has now realized its mistake of neglecting its hardcore consumer and rectified the problem by announcing numerous hardcore-friendly titles. If Microsoft can maintain that balance, then it could satisfy the fans and become a major player in the lucrative informal market.

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