Wedbush analysts Michael Pachter and Edward Woo expect most existing Xbox 360 owners to wait until Kinect's price drops before picking one up, but estimate that early adopters could still drive sales of two to four million units by March 2011.
That range would account for 5 to 10 percent of existing Xbox 360 owners, and specifically refers to the standalone motion control solution that was recently priced at $150
. Microsoft will also be selling a $300 Xbox 360 Kinect bundle packaged with a 4GB console.
Because that bundle is only $100 more than the price of the same Xbox 360 model sans Kinect, Pachter and Woo believe the Kinect's initial $150 price point has a built-in buffer that will allow Microsoft to cut the device's price as needed -- and the analysts think that will happen as soon as early next year.
Although they see the Xbox 360 bundle as a good value, "that standalone Kinect, at $149, is not as good a value as a standalone Wii at $199, which comes with two games (instead of one) and a much deeper library of content," assert the analysts, countering Microsoft's claims today that its Kinect represents a better motion control value than Nintendo's console.
Still, the standalone device is attractive compared to Sony's Move, they point out, which they total at a standalone price of $180, which combines the $100 standard bundle with an extra $80 for a full second controller.
"We think that the Kinect bundle with the new [Xbox 360] SKU has a significant value advantage over Move plus the PS3, coming in at $299 compared to $479 for the Move/console bundle," write Pachter and Woo -- but "we don’t see a meaningful threat to the Wii at these prices," they warn.
And while the Kinect may not be a huge threat to Nintendo just yet, the analysts project that its status as a new technology should help boost Microsoft as well as the industry at large.
"Although 2010 has been a difficult year for the video game industry so far, consumers have shown a willingness to spend money on unique content," they write. "If we’re right about unit sales, Microsoft should be responsible for $450 million in retail sales during the holiday quarter, driving year-over-year comparisons up around 5 percent for the holiday quarter, and around 2 percent for the full year."