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Wedbush Securities analyst and quintessential crystal ball holder Michael Pachter feels that Kinect was former Interactive Entertainment Business President Don Mattrick’s favorite child, and now Mattrick isn't at Microsoft anymore. That’s why he thinks that the technologically advanced camera is going to be removed from the box of the Xbox One, as he explained during the latest episode of the Bonus Round webcast.
Kinect was Don Mattrick’s favorite child. He believed in it, he thought it was gonna change the world. He believed it a mechanism to cross sell skype and to cross sell cable access and doing other things.
I think that as Microsoft developed Skype, they recognized how fast smartphones and tablets have been adopted and I think the overlap of Xbox One households and smartphones and tablets households is probably a hundred percent. I think that Kinect has become almost irrelevant.
I think Skype is a really cool app, but FaceTime works. you don’t really need that Skype in your living room… It’s better if everybody is on the couch, but FaceTime works.
I think the voice command is really cool, but you can use your tablet. The answer is: Don isn't there anymore. You have a new boss over the Xbox division, who has no skin in the Kinect game, so… Sure they’re gonna unbundle. Not in 2014. They will not change the SKU that dramatically in the first full year. It’s a 2015 event.
Pachter continued by explaining that the removal of Kinect will allow Microsoft to cut the price of the Xbox One, but Sony is in the position to stay ahead like it did with the PS2.
Just the way they introduced the 4 GB Xbox after a couple years, they’ll bring one out and it’ll be something that’ll look a little dumbed down… I think they’ll actually pick the core model and put a 2 TB hard drive in it, and then the dumbed down one will have a 500 GB hard drive, and it’ll have no Kinect, and it’ll be 400 bucks. That’s the easiest way to do the price cut. The problem is that if by spring ’15 they cut the price to $400, Sony goes 349 for ours! Sony right now is in a position to stay ahead of them, and this is what happened with the PS2. PS2 kept taking share by cutting price.
I think this is a price game. I think unbundling Kinect is the smartest way to get competitive right away.
The seasoned analyst concluded that Kinect does have a saving grace, and it’s that it caters to the “selfie crowd,” especially with the recent implementation of Twitch broadcasting.
Originally Posted by Valkyre
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