In this edition of PING/PONG, John Lucas (the Black Luigi with the green hat) and Mr. Universal (the Blue Superhero with the yellow underwear) review the impact of Kinect for the XBox 360 in the marketplace over a year since its debut. Did the platform live up to the expectations of the buying public, the industry observers, or even Microsoft themselves? Follow the back and forth from your favorite flappergums and try not to get dizzy in all the mathematics.

Dis-Kinected Realities - Year of the Kinect?

Well in what turned out to be Microsoft’s final keynote address EVER for the International Consumer Electronics Show, Chief Executive Officer Steve Ballmer detailed some interest-arousing factoids for the press. He mentioned that the XBox 360 has 66 million users worldwide, that XBox Live has 40 million subscribers, and that Kinect has shipped over 18 million since launch. Hold on, let’s rerun that last phrase right quick. Kinect...shipped...18 million. So since November 4, 2010, Microsoft has put in transit over 18 million Kinects to sell at the stores. It has been 14 months since its debut and roughly 1.3 million Kinects sold each of those months. Sounds good, right?

Then what’s the breakdown between standalone Kinects and console-bundled Kinects? In the U.S. alone, the 360 has sold more than 7,239,000 XBox 360s in 2011 according to NPD guesstimates. Add November and December 2010 figures to this mix and you get a total of more than 10,469,000. That number is approximately 58% of the stated 18 million figure for Kinect shipments. Makes sense since the U.S. is the largest of the 2 major regions the 360 sells in (the other one being Europe). Wedbush Morgan analyst Michael Pachter once said that just under 3/5 of U.S. 360 sales had a Kinect pack-in. This was noted in January 2011 and you can only imagine how much larger that fraction got as the year went on.

When at one time you saw standalone Kinects being plentiful within 360 games cases, now you always see Kinects bundled in with consoles. It’s a pretty safe bet to say that Kinect sells most when it automatically packed with the 360 but is it the console selling the peripheral or the peripheral selling the console? After over a year of watching Kinect’s market performance, my view is that it is DEFINITELY the 360 that sells the Kinect not the other way around. In that case, can you truly call Kinect a success? To me, Ballmer’s “shipped” quote reveals disappointment in Kinect’s motions. Thoughts, Mr. Universal?

Well, I know we’ve chatted about this many times over the past year, and have somehow avoided the temptation to prematurely label the Kinect a “failure” or “success” based on the info that Microsoft has been spoon feeding the media. The first few months of the Kinect’s lifespan were accompanied by a half-billion dollar cash injection that obviously skewed whatever data at the time, and all comparisons to other platforms and software seemed a bust as there’s nothing else quite like Microsoft’s motion-sensing sensor bar. So, out of fairness, the only way that we could accurately gauge the Kinect’s true ‘success’ pattern would be to compare it to itself.

When the Kinect launched back in November 2010, Microsoft was right to lather the media with positive and uplifting stories about their hands-free marvel, and to primarily target the audience of its inspiration - the Wii audience. Naturally, this meant releasing a host of Wii-inspired games like Kinect Sports (Wii Sports), Dance Central (Just Dance), Your Shape: Fitness Evolved (Wii Fit), and several others. Since dancing and fitness games were the Wii’s biggest sellers, there were several of those available. With that half-billion ready to saturate airwaves and (hopefully) change the hearts, minds, and purchasing habits of would-be Kinect-o-philes, Microsoft claimed to have pushed over 10 million Kinect sensors in little over four months of availability. This feat would secure them yet another of Guinness’ increasingly ignoble ‘World Records’ as the “fastest-selling consumer electronics device” of all-time. Sales data helped show that of all the launch titles the biggest winners were Kinect Sports and Dance Central, not surprisingly, with 4 million and nearly 3 million units sold each.

So, given Microsoft’s Modus operandi of almost requiring yearly updates to their biggest hits, the 2011 buying season saw the first Kinect sequels, and chief among them were Kinect Sports 2 and Dance Central 2. Surely, after a year of explosive growth that saw their Xbox 360 console outsell all competitors and with millions of Kinect sensors in the wild, the accessory should have handily seen equally explosive growth in its first sequels and evergreen titles, much like many of the Wii titles did in its first year of availability. After all, duplicating Nintendo’s wild success in the casual market was the whole reason for this party.

Unfortunately, that didn’t happen at all. I’ll let Mr. Lucas handle the numbers and statistics here, as these things require kid gloves to clear them away from the spin-tastic PR.

Well, we have to go to the infamous VGChartz.com for a good global picture of these sales. The original Kinect Sports launched in America, Europe, Australia and Japan between November 4th through 20th in 2010. Aligning all launches together to map a 10-week sales count, the total sales were 2,050,141. Kinect Sports: Season Two launched in America, Australia, Japan, and Europe between October 25th through 28th in 2011. Total aligned 10-week sales were 1,326,849. The sequel only sold about 65% of the original in a similar time period.

The original Dance Central launched in America, Europe, and Australia between November 4th through 18th in 2010 with Japanese release on June 2, 2011. Total aligned 10-week sales were 1,268,031. Dance Central 2 launched in Australia, Europe, America, and Japan between October 21st through 27th in 2011. Total aligned 10-week sales were 1,069,929. Even with Japan’s launch put in line with the other regions, the sequel only sold a little more than 84% of the original in a similar time period.

Touching on what you mentioned earlier, Microsoft’s Guinness World Record achievement was said to have outdone Apple’s immortal iPhone and iPad when comparing their first 60 days from launch. So how can Kinect sell 10 million in 4 months yet only be able to sell 18 million in 14 months if it’s such a hot property? How come the sequels to its biggest games sell less than the originals? Especially if the Kinect platform’s a rising star? And once again why doesn’t Microsoft have the ‘one hand washes the other’ effect Nintendo’s bundles historically do where the console sells the game/accessory and the game/accessory sells the console at the same time? Kinect simply doesn’t sell if it’s not packed in by default.

But it’s not just hardware that’s the problem. It’s not just the big hit software that’s the problem. It’s the OVERALL software that’s the problem. Microsoft scored big when Ubisoft decided to share the Wii-exclusive Just Dance franchise with Kinect. The one genre Kinect’s hands-free control would seem more natural with is the dance game genre. No more Harmonix-made Just Dance wannabes like Dance Central. Now they have the Real McCoy. At the time of this writing, the Wii version of Just Dance 3 sold 7.17 million while the XBox 360 version sold 1.47 million. There’s no doubt which version President Obama bought for Malia and Sasha for Christmas. Mr. Universal, can you elaborate further on matters like these such as, “Can you tell me how Kinect, how Kinect to Sesame Street?”

Funny that you should mention President Obama, because I couldn’t help but think of his office’s spin-line about job creation that his efforts have “saved or created” when I hear Microsoft’s PR-sanctioned quotes about selling millions upon millions of Kinect sensors in “bundles and standalone” versions.

Those who remember Microsoft’s PR barrage of spin-tastic factoids and statistics when the Xbox 360 was being stomped by Nintendo will remember their insistence on letting the world know the importance of their 8:1 attach-rate, which was impressive when the console wasn’t selling like gangbusters. Yet when it comes to Kinect’s attach-rate, they seem to have given us the silent treatment. If Microsoft had really and authentically ‘sold’ 18 million Kinects, that would translate to just about 27% of the Xbox 360’s lifetime sales tally of 66 million. Yet, that total hasn’t translated into sales for any Kinect software, either physical or digital, which basically means that the Xbox 360 console now probably has a better Kinect accessory attach-rate than the Kinect has with its own software lineup.

There’s no doubt that the Xbox 360 console is selling extremely well, better than ever in fact. And while it may not be pushing software sales like it once did (unless its called Call of Duty), at least developers are seeing a return on their investment in the platform. With the Kinect, it’s clear that not only as Microsoft failed to generate any interest in the platform, outside of indie PC geeks and tech-heads who’ve done some amazing things with it, but they’ve absolutely failed to sell any real software on it for developers who adopted the hardware.

Sales aggregate sites include pack-in specials as “sold” units, like Kinect Adventures, but if you discount those and other first-party releases like Kinect Sports or Dance Central (essentially a first-party release) it becomes clear the Kinect isn’t helping sell just about ANY games, first or third-party. For all the fiction that Nintendo wasn’t moving third-party titles on the Wii, at least that console (when it wasn’t getting dusty) was still capable of selling tens of millions of third-party games like Carnival Games, Cooking Mama, Deca Sports, and several others.

Microsoft long ago realized the importance of being firmly entrenched with the most reliable and headline-grabbing analytic firms out there, chief among them The NPD Group and - if not already - our friends over at VGChartz. Hence the tidal wave of titles like “Kinect leads Xbox 360 To Record Year” or “Kinect Catapults Xbox 360 to...”, and the like. That Microsoft is in bed with these PR wizards has long been the gaming industry’s dirty little ‘secret to everyone’, helping to fill their press releases with so many ‘*’ and ‘**’ that you’d think they were bleeping out naughty words.

And this is how they get away with saying the Kinect has ‘sold’ millions in ‘bundles and standalone’ versions, when it’s pretty clear the standalone Kinect sensor itself isn’t selling at all. That’s like Nintendo saying that R.O.B. the Robot sold 65 million units during the NES heyday. Nintendo’s robot pal may have been a cool pack-in and even came with Gyromite to help get you started, but like the Kinect once the initial thrill wore off so did interest in the tech.

You asked me earlier about how to ‘Kinect’ to Sesame Street? I’m surprised Microsoft is having so much trouble selling games like Sesame Street of Disneyland Adventures, because they don’t seem to have any trouble selling Fantasy Land to the press.

Good points you make there, Universal, but let me correct you on one thing you said. It’s impossible for the XBox 360 console to have a better Kinect attach rate than Kinect has with Kinect games. The best the ‘Kinects per XBox 360’ ratio can get is 1 to 1. You don’t sell multiple Kinects per console. Only one Kinect for any given 360. With 18 million Kinects per 66 million XBox 360s, the ratio is 3/11 to 1 or in less fractional terms 3 to 11. For every 11 XBox 360s there are 3 Kinects.

BUT I did some heavy research on all Kinect-specific games sold at retail and found a rough approximation of their total sales (through VGChartz’s figures). All retail Kinect-required games have sold over 40 million units. So if we take this figure and compare it to the 18 million Kinects, we have a ratio of 2 2/9 to 1 or 20 to 9. For every 9 Kinects there are 20 Kinect games. That approximate 2:1 ratio’s a far cry from that approximate 8:1 they used to trumpet. And keep in mind that I’m INCLUDING the Kinect Adventures! pack-in (which has sold a little under 16 million) in these calculations. Take THAT out of the mix and Kinect retail has sold under 25 million. Take those 25 million Kinect games per 18 million Kinects and your ratio is 1 7/18 to 1 or 12 1/2 to 9. That’s barely over 1:1!

Facts like these make it clearer than crystal that Kinect has failed not only as a software platform but also as a threat to Wii. Kinect was supposed to make Wii old hat and obsolete. How many times did we hear the word “revolutionary” in Microsoft’s press releases about the peripheral that was supposed to stop Nintendo’s Revolution? Hands-free control was supposed to be better. It was supposed to be the future, the game-changer. Kinect was supposed to draw Wii’s newly-won audience away from Nintendo and toward Microsoft’s favorite box. None of this happened despite all the NPD shadow games with the numbers, despite all of the hundred-millions spent in the marketing campaign, despite all the Guinness hype about selling faster than iPhone and iPad. As a platform and trendsetter, Kinect couldn’t make the ‘Kinection’.

As an enhancement, it may have its use. Buyers who find it already packed in might have fun playing with it in Kinect Fun Labs, using it for a webcam, speaking voice commands when using its multimedia features. You have already mentioned the tinkerers and how they tweak the machinery for novel uses. But there’s a reason why Microsoft is now pushing Kinect for Windows and promoting its possibilities in the medical field (which would be excellent). Much like they did with Zune, they’re trying to recover their investment by shopping it around to any venue they can. Project Natal cannot become Project Fatal. I wouldn’t be surprised to see Microsoft trying to sell this to home security firms or sex cam operators. ADT Fortified with Kinect. Hot Cam Gals KineXXX 1.99 per minute.

But Kinect’s ineffectiveness as a game platform puts Microsoft in slow sinking quicksand. Nintendo’s Wii U starts the 8th generation of home consoles by the end of the year, ready or not. Sooner or later, Microsoft will have to make that next-gen leap. But if their old HD way didn’t work AND their new Kinect way didn’t work, how will they put together their next console? If the 360 doesn’t sell as much in 2012 as it did in 2011, then that’s a sign that the console’s second wind is losing its huff and puff. Microsoft would be faced with the dilemma of hanging on to a strong hardware seller in gradual decline or gamble on a whole new console that may not reach the hard-fought heights its forerunner did. No wonder Microsoft sells Fantasy Land. If I were in their shoes, I would want to be Dis-Kinected from this reality too.