Don’t Bank on Kinect

18 Aug
18 August 2010

Shockingly, baby launch consumed more time than I anticipated, so myriad things are complaining about neglect.  One is a set of notes I’ve been carrying around since last year but was waiting for mid-June (hey, only two months ago) to finish.

June was on my mind because of E3 which, in turn, was on my mind because I honestly expected to see something there that would change my mind about Natal / Kinect.  From a distance, this product appears so obviously flawed that I imagined at least some people in positions of authority saw it too and had impressed upon all the need for something that would permit a “now shut up” type of E3 announcement.

Instead, they seem to have just opted for a surreal event.

Kinect isn’t shaping up to be a success.  It’s not going to usher in a new era of anything this holiday season.  It’s certainly not going to help get the Xbox install base from “tens of millions to hundreds of millions” as Molly O’Donnel suggests.  It’s not going to sell through 4 million stand-alone this holiday, nor will 4 million 360s (roughly double the historical) be sold this November / December.  The current sales bumps (around 890k between June and July) are not the result of “expectations for the Kinect’s launch,” they are the result of the price cuts MS announced at E3.

When I ask people what they think about Kinect — be they people working on the project, or other people in the games business, or my neighbors — the responses are not the variety that would make me sleep well at night were it my money invested in this.  There’s generally a “that’s neat” or “it might be cool” sentiment.  When conversation turn to plans for purchase, I almost invariably hear either, “we have a Wii” or “oh, I’m not the audience.”  Frequently, a lukewarm opinion of the potential is tempered with admiration that, with this, at least Microsoft is trying something different.

Let’s be clear: This isn’t Microsoft “trying something different”.  Kinect isn’t the product of a group of whimsical inventors waking up one morning and saying “let’s do something revolutionary and cool,” then convincing Uncle Microsoft to fund their spontaneous leap into Imaginationland.  If it were, the muse responsible for Project Natal should get an award for being the most polite inspiration of all time, given her decision to leap into the mind of someone who just happened to work at Microsoft, conveniently at a time after Nintendo had demonstrated the profitability of motion control, coincidently at a point when MS felt the need for something to boost later-stage platform sales.

This isn’t “trying something different,” it’s what came out of a series of meetings that included comments like, “sweet mother of God, that Wii thing we were laughing about sure seems to have sold a lot” and  “shareholders are starting to ask about our plans for getting a piece of the casual market.”

Microsoft realizes the trajectory they’re on, which is why they’ve already started to backpedal on the gaming impact, with Mr. Ballmer (when done apologizing for speaking of something as trivial as games) discussing the non-gaming potential of the technology, Live’s GM (Marc Whitten)  echoing similar sentiments, and the Euro IEB VP (Chris Lewis) claiming the launch is “set to change how you use entertainment.”

Chilling.

Beyond providing justification for spreading the cost of Kinect development around, comments like Mr. Whitten’s illustrate some of the logic behind the current direction.  Primarily, the persistent belief that there’s a massive “casual” audience lurking about untapped — some vast horde chomping at the bit to spend gobs of money if only someone will offer games they can enjoy.  Clearly the path to victory lies in eliminating the “chilling” number of buttons currently required for people to play games.  You need only look at the vast majority of the casual gaming market today, populated by millions of people playing games with a mouse and a keyboard, to see that the number of buttons is….  Oh, wait….

Additionally, there’s the assertion that gesture control, and all that goes with it, is somehow vastly superior to what we’re all struggling to make do with today.  After all, who in their right mind would want to pick up a remote control and the use the four incomprehensible arrow buttons to highlight a program from the onscreen menu when they could flap their arms about instead?  Or, better yet, who wouldn’t want the television to just recognize them and determine what they wanted to watch on its own?  You remember how much everyone liked it when Mr. Clippy figured out what sort of document you wanted to write, yes?  I’m sure we’ll all be similarly enthralled when the television starts picking programs based on dad’s hat.

You should probably try Fox News here, Kinect.

While both a flawed view of the audience and contrived usage scenarios are issues, they’re really more symptoms.  The core problem is the one that Ries and Trout have been writing about for around three decades — positioning.  Microsoft, in launching the Xbox, saw the Sony PlayStation as their chief competition and went about assaulting their position in the consumer’s mind as the high end gaming platform.  They spent years and billions branding the Xbox (and later the 360) as the most powerful, bleeding edge, multiprocessor, HD, next generation, headshot, hardcore, FPS, surround sound, online-ready super-console.  They own that spot — they are the Ferrari of consoles (yes, the PS3 is there with them but I’d argue that they’re clearly in second place).

Nintendo had no interest in getting into the MS-Sony bloodbath, avoided burning billions in that fray, and went the Wii route instead.  Because of this, they continue to own the “fun” position in consumer minds.  They are Mario and Zelda and kids and moms flailing with Wii-motes.  They are the casual console.  They own that position — they are the Volkswagen Beetle of consoles.

The Kinect is Microsoft’s attempt to get into the space Nintendo owns.  (More accurately, it’s another attempt, since the shift began several years ago when MS started to invested in things like You’re In The Movies.)  Ries and Trout often illustrate this sort of positioning error using the Cadillac Catera.  Cadillac occupies the “American luxury car” in the consumer mind.  But in the mid-’80s, they decided to try to get a piece of mid-sized economy market with the Catera.  It did poorly, as you might expect, because people don’t think “Cadillac” when they’re in the market for a smaller, cheaper car, they think “Cadillac” when they want a giant land yacht.  In the same way, people don’t think “360″ when they want something for casual games and they don’t think “Wii” when they want to go online and shoot people.

To then blend examples, the Kinect is Ferrari launching a cute, low-price, 100HP model to try to take market share from the Beetle.

That seems absurd.  Because it is.

Consider how you’d view it if things were reversed and Nintendo had announced plans to launch a Wii peripheral that turned their existing console into a high-end graphics / competitive online shooter platform at E3.  Or, better yet, while it’s easy to imagine executives at Sony or Microsoft having meetings to discuss what they’re going to do about the Wii, ask yourself if you think there have been a lot of panic-filled meetings at Nintendo discussing ways to fend off the Kinect and Move.

How It Could Have Won

There are plenty of people arguing all sides of this presently.  I’ve seen the reports that claim people don’t know Natal exists.  I’ve seen the reports that claim people don’t care about motion control.

These mean less than nothing.

Before the Wii, a survey asking people if they knew about the balance board would have produced depressing results.  Before Rock Band, a survey asking people if they were interested in a plastic guitar peripheral would have similarly discouraging.  But both of these illustrate a really important point: I didn’t buy a plastic balance board or a plastic guitar.  I bought Wii Fit and Rock Band.  I didn’t buy the peripheral and then go looking for games, the peripheral happened to be part of a game that I wanted.  It made sense.  Nobody had to explain to me why the guitar was better than playing with the controller I already had or entice me into making my purchase by suggesting other uses for the guitar peripheral.

Had MS gone game-first and made the peripheral secondary, Kinect would be vastly better positioned.

(Another way to have been successful here would have been to invest about 10% of what has been poured down this hole into voice recognition alone.  I assure you that replacing the remote control with interpretive dance is less desirable than being able to just say “TV, gimme the History Channel.”)

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1 reply
  1. Verbinator says:

    I’ve been waiting for the “Kinect Failboat” to sail since I first learned of project Natal. I admit that much of my bias comes from the events that began (for me) on that Tuesday in September about 2 years ago. You know the one I’m talking about … the event that has both of us working for different companies now.

    The first official demo videos solidified that “This is not going to end well” feeling for me. Happy family playing games in a sterile, “nobody with kids lives like that” family/living room. Clean furniture lines, no clutter. Who lives like that? More importantly what GAMERS live like that? Show me that it works in the family room with a lumpy couch, a dog on the floor, and household clutter everywhere. Show me that it works in cramped and messy college dorm room. Had they done that, I might have reefed the sails a bit on the failboat of my expectations.

    But my initial response comes from an earlier XBox 360 accessory that this current batch of MGS general managers were pushing. The XBox camera. My experience with the freebie copy of the webcame game “Urine the Movies,” I mean “You’re in the Movies” that MS gave us was not a positive one. My kids and I had to literally strip the family room clean of furnishings to get the thing to work (and I was sore for days from game activity). And all that to get a marginally (and I mean marginally) enjoyable experience … maybe if my kids were in their tweens+ instead of their 20s and if we were all much shorter it might have been more fun for them … I was just sore).

    But after E3, when the hoop-la died down, there was that admission that one couldn’t play the device sitting down. Huh? The device and its recognition software wouldn’t deal with a seated player. Folks may use exercise software and Wii sports games that way, but I personally don’t know anyone who plays Halo Wars or Red Dead Redemption while standing (at least not by choice).

    But you’ve nailed it on the head. Killer Apps sell add-on hardware, not vice versa. 25 years ago I helped design the driving module, roller controller (trac ball), and Super Action Controllers for the Colecovision. No one bought those because they were great controllers, they bought them because they let you play great games like Turbo, and Slither (a licensed arcade game much like Centipede) and Super Action Football and Baseball on the Colecovision.

    But this is Microsoft we’re talking about. This is the company that got into PC games because they saw it as a way to promote and sell more PC operating systems. Only they didn’t learn their own lesson. Make the GAMES people desperately want to play and they’ll shell out for the OS, the console, or the peripheral that is needed to play them.

    Meanwhile, back in the sterile family living room, Kinect has noticed that your 10 year old has walked in the room, has greeted her by name and logged that data in somewhere. Big Brother is watching …

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