Xbox One Ditches Kinect? Analyst Predicts Price Cut By Losing Add-On Will Help Microsoft With Console Sales

Microsoft is reportedly planning a big E3 announcement about their Xbox One and it could be relating to a price cut for their sales-lagging console.

According to DualShockers, industry analyst Michael Pachter predicted during the latest Bonus Round podcast that the big announcement for the Microsoft coming soon is the removal of the Kinect from their bundle.

"Kinect was Don Mattrick's favorite child. He believed in it, he thought it was gonna change the world. He believed it a mechanism to cross sell Skype and to cross sell cable access and doing other things," Pachter told Bonus Round.

"I think that as Microsoft developed Skype," he continued, "they recognized how fast smartphones and tablets have been adopted and I think the overlap of Xbox One households and smartphones and tablets households is probably a hundred percent. I think that Kinect has become almost irrelevant."

Pachter explained the voice commands and other features of Skype paired with the Kinect are "cool," but can also be accomplished with a tablet and you don't need the Xbox One add-on.

"The answer is: Don isn't there anymore. You have a new boss over the Xbox division, who has no skin in the Kinect game, so... Sure they're gonna unbundle. Not in 2014. They will not change the SKU that dramatically in the first full year. It's a 2015 event," he told Bonus Round.

Removing the Kinect from the Xbox One bundle would mean a price cut, which could help their sales. Sony's PlayStation 4 has recently passed 6 million consoles sold worldwide in less than a year within its release. In the same time span, Microsoft's next-gen console has sold about 3.5 million consoles.

"Just the way they introduced the 4 GB Xbox after a couple years, they'll bring one out and it'll be something that'll look a little dumbed down," Pachter said during the podcast. "I think they'll actually pick the core model and put a 2 TB hard drive in it, and then the dumbed down one will have a 500 GB hard drive, and it'll have no Kinect, and it'll be 400 bucks."

"That's the easiest way to do the price cut," he added. "The problem is that if by spring '15 they cut the price to $400, Sony goes 349 for ours! Sony right now is in a position to stay ahead of them, and this is what happened with the PS2. PS2 kept taking share by cutting price. I think this is a price game. I think unbundling Kinect is the smartest way to get competitive right away."

Real Time Analytics