UPDATE 1-Microsoft to sell Kinect at $150, also sell bundles

* Microsoft prices Kinect for Xbox at $150, including game

* Low-memory Xbox unit to be bundled with Kinect at $300

* Analysts say price is high, but millions will sell
(Adds analyst comment on pricing)

By Franklin Paul

NEW YORK, July 20 (BestGrowthStock) – Microsoft Corp (MSFT.O: ) will
sell its new Kinect motion-sensing gaming system for about $150
and also offer it in a package with the Xbox 360 videogame
console when sales of the hands-free device start in November,
the company said on Tuesday.

The price, omitted by Microsoft when it introduced Kinect
at the E3 videogame conference in June, matches the preorder
price that retailers such as Best Buy (BBY.N: ), GameStop (GME.N: )
and Amazon.com (AMZN.O: ) posted online weeks ago.

Kinect sales start on Nov. 4, and Microsoft is sure to aim
its marketing message at the owners of the more than 40 million
Xbox 360 models that have already been sold. The sensor will
come with a family game called “Kinect Adventures.”

Kinect’s camera-based system lets players control games
with body and hand gestures and is seen as a means to spark
sales momentum into the Xbox platform before the holiday
season. The hopes are that it will lure new and casual players
to the Xbox and steal customers from the rival Nintendo Wii
(7974.OS: ) and Sony PlayStation 3 (6758.T: ).

It remains to be seen if cost-conscious consumers and game
fans, many of whom have already bought one or more of the
consoles, will warm to spending hundreds more on hardware, and
Kinect-specific software costing about $50.

Several analysts expect Microsoft to initially sell some 3
million Kinect units, despite what is considered a steep price.
Wedbush Securities analyst Michael Pachter says the company has
room to cut prices or build attractive bundles, but doubts the
sales of the market-leading Wii will wilt.

“I don’t see a meaningful threat to the Wii at these
prices,” he said. “The all-in cost of the arcade bundle is
$299, still $100 above the Wii, although some people will find
that attractive. At this price, it’s not particularly
competitive with the Wii.”

For industry analyst Michael Gartenberg, the price of
Kinect is somewhat higher than he had anticipated, but he said
the inclusion of a game should ease initial sticker shock,
making the system an appealing holiday season option.

“Given the costs of the competition for similar features, I
think Kinect will be able to hold its own in terms of pricing,
especially against Sony,” said Gartenberg of Altimeter Group.

Sony will launch “Move,” its motion-controlled feature for
the PlayStation 3 gaming system, on Sept. 15, hoping to get the
jump on Microsoft’s Kinect. Like the Nintendo Wii, Move’s
motion system is based on a wireless remote control.

Pachter noted that the all-in cost of the PS3 plus a
complete Move package is $479: $399 for the PS3, a game, Move
and Eye camera, plus another $80 for an extra Move and a

While Kinect was a hit at E3, it relies solely on voice,
body and hand gestures — and no buttons — which some critics
say may make precision game controls difficult.

Microsoft said on Tuesday that it would also sell for about
$300 a Kinect unit bundled with a version of the Xbox 360 that
has 4 gigabytes of internal memory. The current standard Xbox
model comes with 250 gigabytes and is priced at $300.

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(Reporting by Franklin Paul; Editing by Lisa Von Ahn and
Richard Chang)

UPDATE 1-Microsoft to sell Kinect at $150, also sell bundles