Microsoft’s Kinect – Market Development

I would like to reflect upon my first ever blog post.  If you have the memory of an elephant – or have revisited the original post – you may recall that I predicted that the Microsoft’s Kinect would be a success and the Sony Playstation’s Move would be a failure.  Well, a year and a half later, the Kinect now holds the world record for the fastest ever selling consumer electronics device, having sold well over 10 million units early this year.  The Playstation Move has done relatively well, considering a higher proportion of PS3 owners have the Move device; but the Kinect is a clear winner.

So why has the Kinect performed better than the Move?  They provide the same benefit: game interaction.  Thus, I belive there are 3 key reasons that made Microsoft’s  marketing strategy for the Kinect highly competitive and created huge sales.

1) Simplicity.  Traditional marketing theory states that a technological product must first be targeted at the early adopters, who then create word-of-mouth promotion, which in-turn attracts the early majority.  However, the Kinect is an extension strategy for the original Xbox 360, but is targeting a new consumer.  In other words, despite the original target market being familiar with technology, Microsoft intended to prolong the life of the Xbox 360 by opening it up to ‘casual gamers’.

This goes against marketing convention; hence, Kinect needed to be easy to understand and use.  Moreover, the simpler the product is to use, the easier it is for retailers to sell to customers.  This is where Microsoft really got an advantage over Sony.  Microsoft used a ‘push’ marketing strategy, whereby they made it as easy as possible for retail staff to promote the Kinect, at the expense of the Move.  In particular, Microsoft gave retailers free Kinects and TVs to allow consumers to try the product in-store.

Although the video above was taken in Microsoft’s own official store, it is not uncommon to see Kinect being played in PC world, GAME or Blacks electronics.  This, obviously, would not be possible without some form of business-to-business marketing strategy – even for consumer products, companies must collaborate with marketing channels.  How does this relate back to simplicity?  As the Kinect requires no peripherals or controllers – or even knowledge of how to play video games – it encourages staff and consumers to try-out the product.  The Move, on the other hand, requires so many peripherals that it is far less welcoming.

2) Social appeal.  This builds upon the simplicity of the product – it is easy to pick-up and play that anyone can join in.  I have personally experienced how fun it is to play the Kinect with friends; the boxing game is particularly a great laugh!  A lot of Microsoft’s marketing emphasises the social appeal of gaming.

This something that is truly baked-into Microsoft’s gaming business unit, which is evident in their huge dedication to Xbox Live, the online gaming platform for the Xbox 360.   Sometimes companies add in features as an afterthought, however social gaming is at the heart of Kinect as it truly enhance’s the consumer’s experience.  In comparison to the Move, expensive peripherals make social gaming much more difficult and, thus, detract from the overall experience (multiplayer gaming for the Move, could be seen as an afterthought).

3) Multiple uses.  Any great product or brand can be expanded for new markets or new uses.  This can be seen with Lucozade.  The same holds true with the Kinect and extends for several levels of alternative uses.  On one side of the scale (related diversification), the Kinect’s motion sensor can track hand movements to allow Xbox 360 menu navigation – ‘Minority Report Style’.  On the other end of the scale (unrelated diversification), Microsoft has allowed third-party developers to utilise the Kinect device for completely different uses.  If any one of their inventions becomes a commercial success, Microsoft will be able to claim royalties for doing no further product development!

To conclude, I belive there is an important lesson to be learnt from Microsoft.  That is, be simple and social.  This means that more consumers understand your product, and then a higher proportion of these consumers will talk about the product.

Before I end, some of you may be thinking I am ignoring an important factor in the Kinect’s success, which is almost like an ‘elephant in the room’.  I am of course talking about ‘Dance Central’, the best-selling game for Kinect.  This shows that another important sales-driver is novelty.   However, the danger of relying on a game to drive console sales is that this is not a sustainable competitive advantage.  To ensure the long-term success of Kinect, I suggest that Microsoft needs to continue to expand the ways in which the device can be used for their own products.  I believe there is a huge potential to introduce it to PC gaming and to the Microsoft Surface.

Please let me know what you think the other applications for the Kinect device could be in the comments section below.

© Joshua Blatchford, author of Manifested Marketing.  25/12/2011

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