UPDATED 13:18 EDT / JULY 13 2010

How To: Add 4% to Gross Revenues (if you are Microsoft) [Kinect]

image We’ve all heard by now about how the sales of Windows 7 is going gang-busters and breaking all kinds of records while doing so. With that aspect of the company looking up analysts are beginning to look at the other offerings that Microsoft is bringing to the market and figuring out how these products are going to help the company’s bottom line.

The one product that has Sandeep Aggarwal, analyst with Caris & Co., interested is Kinect which he believes could generate $2 billion in incremental consumer spending within the year after launch. He goes on to outline four ways that he believes that Kinect can help Microsoft:

– “Material” attach rate for 40 million Xbox 360 installed base; he expects 15%-25% of current owners to buy Kinect in the first year. A 15% attach rate at $149 would mean almost $900 million in incremental hardware revenue.

– Higher adoption and market share gain for the console. He figures the company could sell an incremental one million consoles in the first year, or about $300 million in incremental revenue.

– Sale of new software titles.

– Lower attrition and higher gross subscriber growth for Xbox Live.

Much of the attention is being centered around the idea that Kinect is purely an add-on for the Xbox 360 but both myself and Paul O’Flaherty, my WinExtra on Windows podcast partner, believe that we could also see a wide adoption of Kinect – either through just the software or both software and hardware – on the desktop. If this is the case that $2 billion could easily be a starting point.

[Editor’s Note: 4 Ways that Kinect could help boost Microsoft revenue by $2B is a post from: winextra. –mrh]


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