Is Microsoft’s Kinect Strategy a Bit of a Hit Or a Bit of a Miss?
The Video games market is currently expanding into many different segments thanks to the Nintendo Wii, no longer is gaming targeted towards the 13-40 Male consumer. There is the 60+ elderly market who love to get active by playing Wii bowling or the 30-50 range that are losing weight by using Nintendo Peripheral’s such as Wii fit. Both Sony and Microsoft must applaud Nintendo for expanding a before thin market.
With Nintendo monopolising these market segments Microsoft and Sony have been quick to react. Microsoft is introducing a camera that can track your body movements without the need to keep up anything in your hand whilst Sony are going down a similar path to Nintendo by offering motion controllers. So what’s the deal with ‘Kinect’? Who is it targeted at? And how on earth will they provide competition to the extremely popular Nintendo Wii? This article will aim to answer these questions.
There is no doubt that Microsoft are after the casual market. This newly developed market has enormous possible and is worth millions to Microsoft. Microsoft revealed the Kinect brand at E3 this year and for the first time ever it was broadcast in Times Square for everyone to see. Furthermore, they commissioned a show by the exquisite Cirque du Soleil to show of Kinect which was also broadcasted on MTV. These communication channels are not commonly used in the video game industry to show of new hardware. By broadcasting their E3 press conference live via time square it indicates that they want Kinect to entice the casual gamer into the Xbox experience.
However, is this right group to target? The marketing manager of Xbox 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 underlines their intentions to push Kinect onto the hardcore gamer but the thing is none of the software for Kinect will allurement to them. Casual games such as Kinect sports or Kinectimals will never a system seller for the hardcore gamer. In fact until Microsoft release a Kinect game that the hardcore can get excited about then the chances are they will keep up of the buy. Microsoft built its brand on offering a hardcore experience and it might be unwise to neglect them.
The pricing of Kinect has become a hot talking point in recent weeks. Although not confirmed it has been widely regarded that the price of Kinect will be around $150. Compared to the Nintendo Wii ($180) the value of Kinect could seem very poor. Why would the consumer who currently own a Nintendo Wii depart with a meaningful amount of money to buy a peripheral that is basic a very similar product? Microsoft needs to create a value proposition that warrants the $150 price tag and controller free gaming could be the answer. The rare selling point of Kinect is the fact that they offer a way of interacting with a game without the need to keep up anything in your hands, this is something Nintendo Wii and PlayStation move don’t offer. Microsoft must consequently highlight this advantage when advertising 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 casual market to take notice of this new product. Microsoft have already spent a huge amount on marketing Kinect by the Cirque du Soleil show and by displaying Kinect in various Macy stores. Make no doubt about it they paid by the nose to do so. Marketing of Kinect is set to increase as they crawl towards the release date and consequently costs will increase. Microsoft will aim to recuperate this cost and consequently will set the price as high as $150 however it is doubtful that they will make a profit on every unit sold as according to ‘Develop’ it is costing Microsoft $150 to manufacture the Kinect camera.
The casual market is here to stay and its going to grow and grow. Microsoft are entering a market in which they are determined to gain meaningful market proportion, they are in this for the long term. Kinect is just the beginning for Microsoft. It is expected to be bundled with the Xbox slim when it launches in order for Microsoft to get Kinect into homes across the world. Microsoft will initially want to focus on market proportion instead of profit so expect Kinect’s price to decline and decline quickly. Kinect or maybe an upgraded version will be bundled into the next generation of Xbox console because this will force the consumer to use it.
Consumers are more likely to see the value of Kinect and consequently use it if it becomes bundled in with the console instead of just on its own. Microsoft have a enormous opportunity with Kinect and if sales are slow in the first year don’t expect Microsoft to drop Kinect. It is here to stay and if they do it right it could become a huge success just like the Nintendo Wii. Microsoft’s chief customer is the hardcore gamer and they should not ignore them. Nintendo have currently realised their mistake of neglecting their hardcore consumer and rectified the issue by announcing numerous hardcore friendly titles. If Microsoft can continue that balance then they could satisfy the hardcore whilst becoming a big player in the lucrative casual market.