Microsoft’s Kinect: Did it “Kinect” to you?

Since the first launch of the Nintendo Wii, the video games industry has continued to investigate and develop the world of motion-sensor games, causing a new era in the world of video game and players.  No longer are games targeted to 13-40 year old male consumers; both male and females, from young children to the elders are using motion sensor games to get active & lose weight.

On November 4, 2010, Microsoft officially launched their motion-sensor product: the Kinect.  Using 500 million dollars as their budget, they placed ads on Kellog’s cereal boxes, Pepsi cans, print ads on various magazines.  Launch events with celebrities (Ashley Tisdale, David Beckham, Neyo) playing with the device, and giveaways on the Oprah Winfrey show, Late Night with Jimmy Fallon, and even contests with Burger King helped catch the audience’s attention as well.  More importantly, they placed commercials in between popular shows such as Glee, and Dancing with the Stars.

Clearly, their marketing strategy is to target the casual market.  With commercials that show off the product using catchy music, and participants from all gender and race, Microsoft is trying to promote this gaming console as a new lifestyle to enjoy with friends and family. Given the huge marketing budget, it almost seems impossible for anybody to not have heard about this product.

Although Microsoft is heavily “bashing” our heads with a surplus of commercial and ads about the Kinect, is their efforts and investment paying off?  Just by looking at the kinect sensor sales alone, Microsoft has revealed the this product has sold nearly up to 8 million units over the holidays. So, assuming that they have sold 8 million units, let’s do the math:

Price of the Kinect sensor: $150

$150 x 8 million = $1,200,000,000
$1,200,000,000 – 500,000,000 = $700,000,000

Phew.  That’s a LOT of money, no? But, was the 500 million dollar investment REALLY necessary, or could they have spent less and earned more money in their pocket?

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One Response to Microsoft’s Kinect: Did it “Kinect” to you?

  1. Christine says:

    I think the question whether the 500 million dollar investment was “necessary” is the wrong question to ask, unless you have a way to track the success of each marketing measure you employed, and if you had a way to ask each Kinect buyer if he/she would have bought the Kinect without the advertising, too. This is the curse of marketing – you can’t know whether the money you spend on it is “necessary” or ‘worth it.’ Even advertisement tracking tools online aren’t always right – some people do click on banner and ads by accident – and you never know whether your audience actually ‘gets’ or incorporates the message you are trying to communicate.

    So, instead, a better questions to ask would be “How much products am I likely to sell with only the minimum of marketing measures (maybe based on similar situations in the past)?” and then “What amount of money can I afford to lose without going bankrupt if I decide to increase the marketing budget?”

    Marketing budgets are actually very similar to those in the motion picture industry – there is no definite formula for success, or even to attract a minimum of positive responses from buyers. All you can do is minimize the risk you take through a combination of careful financial planning and relying on previously successful product characteristics (or methods, in the case of marketing).