Microsoft Aims to Triple its Portfolio of Kinect Games

The launch of Kinect for Xbox 360 was one of the big success stories of holiday 2010. With life -to-date sales of over 10 million units, the motion sensor controller caught the imagination of the casual audience, while boosting console and software sales at the same time.

Microsoft’s Xbox Kinect, a gesture-recognition controller – a camera that is able to detect subtle movements and sounds from players.
Source: Microsoft
Microsoft’s Xbox Kinect, a gesture-recognition controller – a camera that is able to detect subtle movements and sounds from players.

But the months that have followed have been pretty barren. There have been no major Kinect releases since December and that has consumers getting antsy.

And if the company wants to maintain its momentum, Kinect will need to be a primary focus at E3, the video game industry's annual trade show.

Part of the problem is that Kinect was a product that made it to retail in a rushed fashion. That meant Microsoft had to cut corners that, though invisible at first, are starting to become more apparent.

For example, the system's dashboard, which is where users navigate options, is clumsy—and Microsoft knows it. The company has been talking with developers about ways to improve the interface.

The lack of a standard interface between Kinect and the Xbox is also becoming apparent. Standard actions such as pausing the game or returning to the main menu vary from title to title, meaning players need to re-learn how to play every time they buy a new game— something Microsoft would never have dared to do with a system launch.

E3 Electronic Entertainment Expo - A CNBC Special Report
E3 Electronic Entertainment Expo - A CNBC Special Report

The launch games weren't overly compelling either, something that's fixable, but if it's not addressed could be the biggest threat to Kinect's future success.

"While it started relatively strong, it faces the same problem as the Wii," says Adam Sessler, co-host of X-Play on G4 TV. "There's a novelty to it in the beginning, but there's no compelling reason to keep playing. I think they don't need to worry about the hard core audience, [but] they need to find a way to use the device with a substantive game. They do not have games [so far] that people develop any sense of relationship with, so it's disposable."

Disposable or not, the games have sold. "Kinect Sports" sales have topped 3 million worldwide, while "Dance Central" has sold 2.5 million copies.

And Microsoft has acknowledged the drought of new games, saying the Kinect portfolio will triple before the end of the year, with many of those titles being rolled out at E3.

In addition to games for a more casual audience, Microsoft is expected to discuss Kinect functionality on games that are targeted at the core gamer at E3, such as "Forza 4".

Analysts say that's a risky proposition. Because controlling a game with the peripheral is less exact than with a standard controller, converting fans of "Gears of War" or "Call of Duty" will be difficult.

"I think it's hard to make a core game title for Kinect," says Mike Hickey of Janco Partners. "Elements are one thing. If you want to enable voice commands or certain motions, that's one thing, but you don't want to make it gimmicky. These are major entertainment experiences and you don't want to endanger them. I mean, throwing a grenade, versus pushing a button on a controller? I don't know…"

Of course, with Kinect's technological capabilities, Microsoft isn't solely reliant on games to increase its appeal. The company's recent acquisition of Skype, for instance, opens up a number of possibilities for the peripheral (which already has a limited video phone functionality).

Of course, Microsoft may simply choose to focus on a few select titles and new non-gaming functionality at E3, keeping its powder dry for a bigger push later in the year.

"My sense is Kinect, by the nature of its games, was not expected to be a format for gamers," says John Taylor of Arcadia Research. "It was originally meant to be a casual audience sort of thing. By definition, that means it's going to be more holiday focused."