Kinect Moving Faster Than Move

A survey from six months ago, before the releases.

Some numbers provided by industry analyst Michael Pachter point to a rather disappointing sales result for Sony, at least when compared to Microsoft. Seems like Kinect bundles outsold Move bundles by 5 to 1 in December. And the two top Kinect titles outsold the two top Move titles by 13 to 1. Microsoft claims to have shipped a total of 8 million Kinects thus far, which is not the same as sell-through, of course. Still impressive, though.

 Ultimately, I suspect Kinect has importance for Microsoft beyond games. They hope it can be a catalyst for selling more Xbox 360s for non-gaming usage, as a useful interface for watching movies and other non-gaming activities. I remain skeptical about that, though I think Kinect has more of a shot at that than the Move. Will either mean a big market for motion control games on non-Wii platforms? No, not unless they're packed in with each and every console sold, which isn't likely to happen any time soon. If ever.

Wii Move Kinect! Sales Are In Motion

The big story of the holiday season for the videogame industry is this: Who will win the battle of the motion controllers? Some information from the front has come in from all three combatants, so let's look at the body count and see if we can figure out who's winning.

Nintendo crowed about their sales figures over the Black Friday week (November 21-27): They sold 900,00 DS's and 600,000 Wii's. An impressive amount given the anemic sales of the last few months... Nintendo sold more than two month's worth of Wii's, at their latest rate, in one week. They claim the pretty new colors are the reason... OK, maybe, or maybe it's just the price point and the software bundles.

Wow, who could top those sales numbers? How about Microsoft, announcing that another 1.5 million Kinects have been sold, for a grand total of 2.5 million in 25 days. I guess that $149 price point isn't dimming the enthusiasm... although we don't really know what they could have sold if the price was $99, do we? You have to admit Microsoft's numbers look impressive compared to the Wii, since they've sold roughly 2.5 times what Nintendo has sold in the same period of time, at nearly the same price point... and the Kinect isn't even a complete game system.

Microsoft clearly crushed Nintendo in that time period, so how about Sony? They couldn't resist chiming in with their sales numbers for the Move: 4.1 million Moves sold worldwide so far. OK, they did have an extra week or two of sales over Kinect, and the price tag is roughly 1/3 to 1/2 the Kinect (depending on the configuration)... but it's still a big number. And, once again, this is not a complete game system. Nintendo who?

The big caveat with all the waving of sales numbers in the age-old game of "Mine's bigger!" is that these numbers most likely represent sell-in, not sell-through. Sell-in is much easier for the companies to track, because that number is in their sales software. To get sell-through numbers (that is, what customers have actually purchased and taken home), they have to rely on retailers... a notoriously secretive lot. Still, I don't think there's huge numbers piling up at retailers. But some analysts are wary of the reports of "shortages", sensing an all-too-common manipulation of inventory in order to create the appearance of overwhelming demand. In the hopes of actually creating more demand, because it's scarce, so you have to get it now before it disappears...

It will be educational to see the overall numbers for the 4th quarter, both for consoles and for the add-ons. So far, based on these early numbers, it looks like Microsoft and Sony are crushing Nintendo. New technology beats old tech in new colors, I guess.

Kinect, Move Both Selling Well

The two big gaming hardware introductions for the holidays, Microsoft's Kinect and Sony's Move, are both selling well out of the gate. Microsoft has boasted of selling more than 1 million Kinects in 10 days, and they expect to exceed their enhanced target of 5 million units through the holiday season. They also noted it would be launching in Asia in a few days, though anyone who knows how poorly the Xbox 360 has done in Japan would know not to expect too many sales for Kinect from there.

Sony, not to be outdone, has also stated that Move has sold more than 1 million units in North America and 1.5 million in Latin America, though they haven't provided recent updates for those figures. Of course, the Move is only $49 compared to the Kinect's $149... though of course you really want to get a couple of Moves to equal what the Kinect gives you.

Both motion control packages seem to be doing well, and probably will continue to do so during the holidays. The big loser in all of this is Nintendo, as Microsoft and Sony have just taken away one of the Wii's major selling points as the only console with motion control. Both Microsoft and Sony now offer better motion control solutions than Nintendo, though Nintendo still has them on price.

But I think this changes much of the argument over which console to get. When the Wii was first introduced, I think part of why it did so well was because it was a great family-oriented console, as well as being $200 to $300 cheaper than what Sony and Microsoft were selling. Now, all three consoles have a nice array of family-friendly, easy to play titles (Kinect being even easier with no controllers whatsoever), and the price differential is down to $150 or even $100 (not if you count the motion control bundles, true). So the kids can argue more successfully for the Xbox 360 or PS3 with all the cool games they really want... because the family can play games on them too. (And if you want a Blu-ray player, the PS3 becomes an even better deal.)

Is it a coincidence that Wii sales are off 60% over last year? Yet Nintendo seems to be content to rearrange the deck chairs rather than changing course. I think Santa's gonna bring them a lump of coal for Christmas.

To PR, Or Not To PR

Microsoft has certainly had some great PR moves in the past, and some excellent marketing. But every once in a while you get a blooper like this one: In an interview with Gamasutra, [Microsoft Kinect spokesman] Tsunoda boasted that Kinect will "blow away" iPad sales. The iPad sold 1 million units in its first 28 days on sale, and sold 3 million in three months.

OK, I understand you're trying to boost Kinect sales. But comparing how Kinect will do with something that is only vaguely connected, and is three or four times the price, isn't saying anything more than "I'm bad at PR." If you want to throw down a gauntlet, say that Kinect will beat out Move sales... though you'd have to be pretty convinced of your product to make that claim. Move is, at least on the surface, cheaper than Kinect (though you really have to compare a pair of full sets of Move controllers to a Kinect ). There's enough differences in pricing and configuration that you'd have to be really precise in order to make any kind of reasonable comparison (how do you count bundle sales, for instance?).

Really, it would be better to content yourself with something like "Kinect is going to sell millions of units over the holiday season." That gives you some wiggle room... does Easter count as a part of the holiday season?

For those of you called upon to be a press spokesman when it's not your day job, resist the temptation to be snarky or boastful. Be thoughtful instead... ahead of time. Prepare some remarks for the inevitable question you know will be coming; go over your answers carefully and think about how they'll come across. If you get asked questions that aren't on your prepared remarks, make a note and say you'll get back to them later on that. And then do so.

Kinect Revisited

Microsoft is being coy about Kinect's lag issues; the lack of responsiveness in this interview was deafening. Concerns are still an issue, as this article on 1Up shows (Rare denies it's a problem, but then says in their Kinect Sports title it's 150 ms, which is nontrivial for action gamers); and showing the Kinect on Jimmy Fallon you can see where lag is still a big problem.

Meanwhile, Microsoft's online store has Kinect priced at $149, so I guess I shouldn't give Microsoft the benefit of the doubt about holding off on pricing. Looks like it's a done deal at the $149 price point. Which seems odd for a device clearly targeted at casual gamers, who can get a Wii for just a little more (if they don't already have one, that is). Hardcore gamers might drop $149 if the hardware made their games cooler, or there were interesting titles that were Kinect-only, but that doesn't look to be true at all, or even possible given the amount of lag. Perhaps you could enhance gameplay a bit with Kinect, but not if your buddy online kills you every time because he's using a controller.

Bottom line: The Kinect looks like a loser to me. It will sell some units, but the Wii was there years ahead and already captured the market, and still has a price advantage. The Kinect will not be for hardcore gamers, and unless it sells a lot of units quickly (which seems highly unlikely at $149), developers won't be rushing to support it... and it will never take off. Perhaps they can incorporate the technology into a next version of the 360 (if there is one), and at that point maybe advances in processor power can make the lag issue go away inexpensively. Until that happens, don't expect much from the Kinect.

Sony's Move? A little better, because at least it offers a $49 entry price (which quickly mounts when you look at all the other stuff you probably want to buy, though... and then each player will need one, too). Lag should not be an issue, so it's possible to see the Move being used for action games. Still, it all comes down to installed base. If Sony can get enough units out there fast enough, developers will support it. I predict mediocre success; more units than Kinect, and another reason to buy a PS3, but not a huge industry boost.

Meanwhile, Wii trundles forward... and if either Kinect or Move starts to look like a threat, Nintendo can drop the price to $149 and stab their grandiose dreams through the heart.

It's kind of sad when you think of all the marketing effort and dollars that went into these motion control devices. That was their best shot? Wasted effort... should have spent more pushing their games. If they really wanted an influx of players, they should have cut deals with social game companies or opened up their download markets even more. That would have been a... smooth Move? Added some Kinect energy to the game industry? I guess Wii'll never know...

The Big Three Offer Small Change

E3 has been interesting viewed from afar. It's clear the classic electronic gaming industry (console games with a dash of PC gaming, though non-MMO/social/Flash PC gaming has been waning) is in trouble; sales were down 8% in 2009, and sales this year look to be in similar dire straits without a booster shot. So aside from a slew of sequels, what is being offered by the Big Three (Microsoft, Sony, Nintendo) that represents a possible sales jump?

Microsoft is offering Kinect, its motion-control peripheral, for $149, and a dozen titles that look very similar to the Wii's greatest hits -- simple sports. The Achilles Heel of the Kinect is not just the high price point; it's the fact that it sucks up a large part of the 360's processing power, to the point of causing noticeable lag even in the simple games being shown. This means the Kinect will not be of much use to the power gamer, which represents most of the current 360 audience. So Kinect must be aimed at the casual gamer... who's already got a Wii, or for about the price of a Kinect alone could get a Wii (I expect to see the Wii at $149 by Christmas, unless Nintendo wants to continue losing share). The Kinect's price point means it won't get a large installed base any time soon, if ever, which means we won't see any games that require the Kinect... which means even less reason to buy one. Net result: No big industry impact.

Sony is trying a similar tactic with the Move, though at least it's only $49... well, of course, you need to add the Navigation controller for $29.99... and that's only for one player, so you need to double that to $160... and you probably want a Playstation Eye, which is $39.99... so you're looking at $200. Which makes it even more expensive than Kinect and not as cool. And again it's unlikely to be appealing to hardcore gamers -- certainly not from the types of games they are showing for the Move. Sony is also pushing 3D display technology, which has a possibility of appealing to the hardcore... but it's hampered by the cost of the display, which currently runs at $2,000 or more. Sure, Sony will try to push for 3D-capable TV sales, but no one would expect that to be a significant market share for many years. Again, no big industry impact.

Nintendo is throwing all of its weight into the 3DS, which is their new DS-style handheld with a no-glasses-needed 3D display. Nice, but how useful will the gimmick be in actual gameplay? That remains to be seen. Meanwhile, no attention to the Wii's price point or its aging technology, and no hint of any innovation in business models. I think the 3DS may stop the hemorrhaging of DS sales, but it's not going to ignite a revolution. The iPhone 4's and iPads will be busy leading that charge.

The problem for all of the Big Three is that they're seeking to appeal to casual gamers, yet those who are the most likely targets for that have either already purchased a Wii, or are busy playing Farmville or iPhone games. Once Google TV and Apple TV bring inexpensive or free-to-play gaming to the family room, the ability of the Big Three to gain significant numbers of casual players will be next to nil.

Meanwhile, executives at third-party publishers are busy saying nice things about the new hardware offerings and how great it will all be for the industry. Which is the best they can say, given the situation. Meanwhile, they are looking for ways to grow that don't require reliance on the Big Three. Because it looks from here like the console era is drawing to a close.

More E3 Musings

The press releases are starting to spread like a massive oil spill from E3, though fortunately in this case no wildlife is threatened. Still, there's the sticky ooze to contend with... in this case, a sludge of desperate hyperbole trying to build up the traditional game industry's prospects. Much of the attention and hope for the future is focused on two hardware trends: Motion controllers and 3D displays. Many in the game industry seem to be expecting these things to cause a surge of new interest and sales in game consoles and games, putting the industry back on a solid sales growth trend. Sure, and if pigs had wings maybe bacon could fly onto your plate, but I wouldn't expect it.

Here's some evidence that, industry hopes to the contrary, the customers aren't exactly itching to spend money on motion controllers. This study shows there's less than 10% of Playstation and Xbox customers intending to purchase either Move or Natal, respectively. Not exactly a massive sales surge. What would it take for these things to be successful? Well, they'd have to be priced comparable to a game ($49 or $59), and include with that price a hotly anticipated game (or a sequel to a best-selling series) that takes full advantage of the new hardware. And then they'd have to market the hell out of it. With all that, you could maybe get 60% penetration of the existing base... and perhaps you'd want to start packing that thing in with the console in time for the Christmas market, so you would know you'd have 100% of future sales with the new controllers. Then you'd better have a lot of help and encouragement and some funding for new games that use your new hardware, and make it compelling for new customers to buy your hardware. Then perhaps you'd get some significant sales increases due to your new hardware. You think it's very unlikely that this will all happen? I agree.

And it's even worse for the 3D display idea. Either customers are going to have to drop $2000 or more on a new 3D-capable TV, and $100 for each pair of glasses, or get a new 3DS which doesn't require glasses. And aside from the ability to more easily generate nausea in gamers, how exactly is this going to improve the gameplay? How well will the 3DS work in a range of ambient lighting conditions, and even if you do get a good 3D effect, how again does it improve gameplay? Those answers aren't obvious.

Maybe E3 will show clearly how these new hardware technologies will transform the industry and put traditional game sales back into a solid growth pattern, instead of trending downward like this year and last year. Meanwhile, business model innovation has been posting amazing growth in the gaming industry: Free-to-play, social gaming, mobile gaming, virtual sales, DLC... and soon Google TV and Apple TV. Much of that sales growth is proven, and the wiser publishers are jumping into it. Look for announcements in those areas if you want to identify companies poised for growth. Companies that ignore those areas in favor of shiny new hardware are the ones taking the huge risks.