Pachter on Xbox One: Microsoft Should Unbundle Kinect to Lower Price; Sony is “Kicking their B*tt”

Pachter on Xbox One: Microsoft Should Unbundle Kinect to Lower Price; Sony is “Kicking their B*tt”

Wedbush Securities analyst Michael Pachter is known to be very vocal on what Microsoft should do to catch up to Sony in the battle between the Xbox One and the PS4, and today he mentioned during the latest episode of his webcast Pach Attack, that the only way for that to happen is for Kinect to be removed from the bundle:

I think the big potential change is to unbundle Kinect. if they unbundle Kinect, I’m not sure that’ll necessarily means a different Xbox One. I think that means a Xbox One without the camera and microphone array in the box. If you think through what Kinect does and what it’s necessary for… It’s necessary if you wanna play a Kinect-enabled game, and there really are none that make any sense except Dance Central on the Xbox 360 and Kinect Sports. I mean, really the rest of them are not that fun, and I don’t think very many people really bought them or care.

He continued by say that voice commands are great features, but Kinect can still probably be replaced by SmartGlass.

Pachter mentioned that Microsoft will not acknowledge it, but according to him Kinect adds $100 to the cost of the Xbox One: Microsoft will tell that they’re charging $500 because the “value proposition is $100 greater than PS4,” but as of now the PS4 is “Kicking Microsoft’s b*tt”

He added that Microsoft isn’t going to make a comeback and pass Sony unless they cut the price, and if they wait until they can drop the cost without dropping Kinect to $400, at that point Sony will be able to cut the PS4 down to $300 and they probably will.

Microsoft needs to get rid of Kinect and get the price down to 400 now, or Sony’s gonna beat them. I think Microsoft cares enough that they’ll probably consider a price cut, and the only way they can do a price cut is to unbundle Kinect. So that I think may happen. I would not expect that in the first half of 2014.

Personally, I’m not too sure Microsoft is ready to make that jump just yet. It’d be another big “180” that would probably cause quite the backlash, without considering the fact that Microsoft would have to give up almost all that’s left of the original vision they had for the console.

Of course I might be wrong. Pachter does know the industry well enough, and he’s used to talk to investors, and it’s to investors Microsoft has to report every quarter.