UPDATE 2-Microsoft sees 5 mln sales of motion-sensing Kinect

* Sees 5 mln Kinect sales, worth at least $750 mln

* Previous forecast was 3 mln

* New device takes on Sony’s Move and Nintendo’s Wii

* Goes on sale at U.S. stores at midnight
(Adds executive comments, line at New York store)

SEATTLE/NEW YORK, Nov 3 (BestGrowthStock) – Microsoft Corp (MSFT.O: )
is expecting to sell 5 million of its new controller-free
Kinect gaming systems this holiday shopping season, potentially
adding $750 million to the software company’s revenue this
quarter.

The $150 device, which plugs into Microsoft’s Xbox gaming
console and allows users to play games simply by using gestures
and voice commands, goes on sale at midnight in 30,000 stores
across the United States.

Microsoft is hoping to challenge Sony Corp’s (6758.T: )
(SNE.N: ) Move and Nintendo Co’s (7974.OS: ) Wii in the expanding
motion-based gaming market, and reinvigorate the $60 billion
global video game industry, which has been hit hard by the
economic downturn.

In September, the company forecast 3 million Kinect sales,
but the head of Microsoft’s entertainment unit Don Mattrick
raised the projection to 5 million in an interview with Reuters
on Wednesday.

“Presales have exceeded expectations,” said Mattrick.
“People are coming to us and saying this is must-have holiday
item.”

High demand for the Kinect may lead to shortages, Mattrick
warned, which could crimp sales.

“We’re anticipating that some of our partners will be sold
out at points of time this holiday, and that’s something we’ll
do our best to work through,” he said.

There will be midnight events at 5,000 U.S. stores to mark
the launch of the new product. By late-afternoon, about 100
people had formed a line outside Toys R Us in New York’s Times
Square, where Microsoft is holding a splashy launch and is
giving away free games to early customers.

Overall, more than 30,000 U.S. stores will sell Kinect,
including branches of Wal-Mart Stores Inc (WMT.N: ), Target Corp
(TGT.N: ), Best Buy Co Inc (BBY.N: ), GameStop Corp (GME.N: ) and
online at Amazon.com (AMZN.O: ). It goes on sale on Nov. 10 in
Europe and Nov. 18 in Asia.

AIMING FOR NON-GAMERS

Microsoft, which unveiled the system under the project name
‘Natal’ last year, is selling Kinect for $150 or as part of a
package including a 4 gigabyte Xbox for $300.

The device itself is a roughly foot-long, thin black box
with three camera sensors, which plugs into the back of the
Xbox. It comes with one set of games called ‘Kinect
Adventures’, scenarios where players navigate courses on
fast-flowing rivers, underwater and in space.

There will be 16 other games available for the holidays,
Microsoft said, including sports, dancing and fitness-themed
titles.

Sophisticated shooting games like Microsoft’s Halo series
are not expected to be available on the Kinect, as the company
is aiming to spread the appeal of hands-free gaming to a wide
audience rather than attract existing hardcore gamers.

Ultimately, Microsoft is hoping the new technology will
help extend the role of its Xbox, which has sold 45 million
units in the decade since launch, and introduce a concept that
is expected to feature in forms of electronics and computers in
the next few years.

If Microsoft hits 5 million Kinect sales, it would generate
at least $750 million in new revenue, and likely spur more Xbox
sales. Analysts expect the company to report $19.1 billion in
revenue for the current quarter, according to Thomson Reuters
I/B/E/S, up slightly from $19 billion in the year-ago quarter.

Microsoft shares fell about 1.1 percent to $27.08 on Nasdaq
late Wednesday afternoon.
(Reporting by Bill Rigby in Seattle and Liana Baker in New
York; Editing by Gunna Dickson and Richard Chang)

UPDATE 2-Microsoft sees 5 mln sales of motion-sensing Kinect