Background

One of Microsoft's greatest innovations of recent years is the Kinect for Xbox 360 which was
initially called "Project Natal" signifying birth back in 2009 (The Verge 2014). In the
following year's November it was launched simply as the Kinect 360.
The original Xbox was released in the year of 2001 while its successor, the 360 was put on
sale in 2005 to take on Sony's PlayStation 3 and Nintendo's Wii. The 360 was not just a
gaming console as it enables users to the possibilities to play CDs, watch DVDs and use
third-party contents (Microsoft 2014). Online streaming of such activities is also feasible
given the connectivity to the Internet. The 360 was also involved in the high-definition DVD
format war where Microsoft embraced HD DVD opposing to Sony's Blu-ray (Trott 2012).
The Kinect is only operational when being connected to the 360 where it functions as a
controller that reacts to user's speech, movement and gestures on top of web conferencing
(Microsoft 2014). The peripheral functions in conjuncture to any Xbox game but the game
title Kinect Adventures! was developed alongside to demonstrate its full potential (Microsoft
2014). It was then embedded with facial recognition mechanics later in its lifetime.
After much success of the 360, Microsoft has recently launched the Xbox One with an allnew Kinect that has an even faster response time and improved camera to rival Sony's
PlayStation 4.
Vision/goals
Microsoft had a vision of transforming consumers' living room into a computing environment
with the 360's ability to embrace all multimedia. Following that, the highly-successful
Kinect's aim was to broaden Xbox 360's audience and prolong the life of the console (Los
Angeles Times 2014). That aside, the company envision to involve the whole of their bodies
of gamers instead of just their hands.
Product portfolio
A huge array of accessories is available to the Xbox like 7 types of controllers to suit its users
gaming preference, the infamous Kinect, keyboard, headset, remote control and the
possibility of hard disk expansion (Microsoft 2014). Microsoft also retails Xbox Live at a
reasonable annual fee that promises unrivalled multiplayer experience, latest HD movies and
TV shows, music streaming, free games, Skype and many other features (Microsoft 2014).

Milestones
Despite criticised of being pricey, the Kinect is highly praised for its technology in motion
detection and speech input. It was crowned the fastest selling consumer electronic device by
the Guinness World Record and T3 magazine's gadget of the year 2011 (T3 2014). More
importantly, Microsoft was awarded the MacRobert Award for its groundbreaking innovation
(Popular Mechanics 2014). In the final quarter of 2013, 24 million units of the Kinect 360
while 78.2 million units of the Xbox 360 have been sold (Makuch 2013).

Comparisons with Competitors

Xbox 360 Kinect vs. PlayStation Move vs. Wii Remote Plus
As a part of the seventh generation of videogame consoles with the similar concept of
motion-sensing, Microsofts Kinect for Xbox 360 receives direct competition from the
PlayStation Move and Nintendos Wii Remote Plus. PlayStation Move works together with
its Eye Camera making it the combination of both Kinect and Wii Remote Plus while Wii
Remote Plus works with a built-in MotionPlus sensor (Greenward 2010). Although the three
products target on the same market seemingly but it turns out that those three products are
aiming at different type of gamers. According to Ackerman and Stein (2010), the Move
focuses more on self-identified gamers and Wii Remote Plus is basically for everyone but
aiming more on kids while Kinect is perfect for casual players. The three companies are

taking much advantage of the technology advancement in order to come out with advanced
gaming devices that track movements. However, the built-up of Wii Remote Plus was not as
complicated as Kinect and PlayStation Move as it only uses an accelerometer to detect
motion (Greenward 2010). Furthermore, Kinect has better graphic resolution compare to Wii
Remote Plus which has the lowest resolution among the three products. Nevertheless, people
who intend to purchase Xbox 360 Kinect should think twice before purchasing it as setting it
up requires a spacious area in order to capture better movements.
The Xbox 360 Kinect also faces competition from other market players such as television,
movies, music, the internet and many other forms of entertainment (Home Entertainment
Software Industry Profile 2010). Vizio, a company that produces television is one of
Microsofts Kinects indirect competitors. Media channels of distribution have been
integrated in its television. Thus, people who have purchased an Xbox for the media platform
can also purchase a Vizio TV with those capabilities inside. Televisions have also indirectly
compete with the Kinect because they both are competing for discretionary spending and
leisure time of consumers (Home Entertainment Software Industry Profile 2010).

Current Competitive Strategies/Outcomes

Although Microsofts Kinect might not be as competitive as Nintendos Wii Remote Plus in
its pricing strategy as Nintendo offered the cheapest price range among the three products but
it stands out in the market as being the controller-free videogame console (Greenwald 2010).
This has differentiated Kinect from other products by being the first videogame system
without requirement of any handheld devices. In addition, according to Datamonitor (2013),
Microsoft has developed strong brand image and customer loyalty since year 1975. Having a
strong brand image and customer loyalty might actually help the company to create a
competitive advantage for its product Xbox 360 Kinect as current customers would rather
deal with the weaknesses of Kinect than having to incur the cost by switching to other brands.
Besides the Xbox 360 Kinect, the current successor Xbox One with its new feature voice
command where most commonly needed commands can be performed by the gamers via
voice has also obtained a complete standout in the gaming industry (Thurrott 2013).

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