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Kinect Could Give Microsoft Billion Dollar Revenue Boost, Says Analyst

| 13 Jul 2010 12:47
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Anywhere from 6 - 10 million people will buy Microsoft's new motion controller, says Caris & Company analyst Sandeep Aggarwal.

According to Aggarwal, Kinect could generate $2 billion dollars in revenue in its first year through a combination of hardware, software and services sales, with roughly half of that going back Microsoft itself.

Unsurprisingly, Aggarwal believes that sales of the Kinect hardware will be the biggest single contributor to this amount. He predicts that between 15% and 25% of the Xbox 360 install base will purchase it at a price of $149, which translates to revenues of $900 million - $1.5 billion. The rest will be made up of game sales, an increase in Xbox Live subscriptions, and the sale of around one million additional Xbox 360 consoles.

It's hard to know what to make of Aggarwal's predictions, because although an attach rate of 15% over the course of a year seems quite reasonable, the $149 price tag could be a stumbling point. Much of Kinect's success will depend on how it is marketed and getting people excited about it; if Microsoft can do that, then Aggarwal's predictions may even end up seeming conservative.

Kinect is due to be released on November 4th.

Source: Barrons via Edge

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