Microsoft has been reluctant to give a solid price for Kinect. Sony has already give PlayStation move a $50 price tag months ahead of release. Early rumors stated Kinect would cost consumers around $200. This price was denied by Microsoft, but retailers are now listing $150 for Kinect. This whole situation is starting to raise some eyebrows as to whether there may be some issues from within Microsoft that prevents an official pricing statement.
One anonymous source told Develop the cost to manufacture Kinect is about $150 for each unit. This means if Microsoft sells Kinect for $100, it would lose $50 in the process. If the source is accurate, Microsoft will have to sell Kinect at a premium to turn an instant profit. The problem is that Kinect is marketed towards a casual audience who aren’t so keen on spending a lot of money on what is perceived to be a camera. When you add on $59.99 for a Kinect game, you’re moving into a price range that is equal to a full console purchase.
This isn’t the first time the Xbox 360 division has operated with a loss. In 2007 Microsoft absorbed $1 billion to extend the warranty of every Xbox 360. Microsoft bounced back after that and will probably do it again.