Seeing Kinect in a Different Light

There were plenty of reasons to get excited heading into yesterday's debut of Microsoft's (Nasdaq: MSFT  ) Kinect, the $150 state-of-the-art motion controller that uses a camera to identify gamers and actions.

Folks had been camping out at Toys "R" Us' flagship store in Times Square since earlier in the week. Microsoft raised its forecast, going from expecting to sell 3 million Kinect units during the holidays to a whopping 5 million.

However, the long lines at the massive Toys "R" Us with the working Ferris wheel inside might have been the result of a special promotion promising $150 in bonus games and goodies for the first 3,000 buyers. Microsoft's amped-up outlook is also difficult to quantify. Are orders really picking up steam or is Mr. Softy simply trying to fabricate hype -- something that routinely happens in the gaming industry?

I'm skeptical. I've been tracking the best-sellers on Amazon.com in recent weeks to get a good read on holiday trends. Kinect appears to be trending considerably better than Sony's (NYSE: SNE  ) Move controller in its debut two months ago, but it has failed to displace Activision Blizzard's (Nasdaq: ATVI  ) Call of Duty: Black Ops at the top.

Now there's a little notoriety to overcome. GameSpot -- the video gaming website, not to be confused with video game retailer GameStop (NYSE: GME  ) -- is claiming the Kinect's facial-recognition features may work poorly with dark-skinned gamers. The system failed to consistently recognize a few of its employees with dark skin tones, according to GameSpot.

Consumer Reports quickly jumped on the claim for some testing of its own. It couldn't replicate the flaw, saying the problem may simply be a low-lighting issue. It refers to a Hewlett-Packard (NYSE: HPQ  ) webcam that had the same recognition shortcomings under less than ideal lighting.

Good news: The credibility-bestowing Consumer Reports believes the GameSpot claims are bogus. Bad news: The requirement for providing a consistently well-lit gaming environment may be a turnoff to gamers who prefer to play in dim-lit conditions.

I'm still not sold on Kinect, despite the early buzz. It will need to achieve a critical mass of users for software companies to actively develop for the platform. A motion-based controller also seems like an odd choice to breathe new life into an industry that's been in a funk for nearly two years.

We'll see how it goes. Kinect is clearly in the spotlight this week. Judging by the lighting requirements, a spotlight is probably a good thing.

Does Microsoft's Windows Phone 7 stand a chance? Share your thoughts in the comments box below.

Microsoft is a Motley Fool Inside Value pick. Activision Blizzard is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. Motley Fool Options has recommended writing covered calls on GameStop. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Activision Blizzard, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz is waiting before making the leap to motion-based controllers. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy wants to connect with you.


Read/Post Comments (6) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 05, 2010, at 12:24 PM, dandles2020 wrote:

    I don't know ... that video of Ellen dancing to it on her show made the Kinect look pretty fun.

  • Report this Comment On November 05, 2010, at 12:44 PM, dileepkrp wrote:

    OMG!!! This will put off people who want to play facial recognition in dim light... just as any camera would flop since it requires light to capture an image.. OMG end of the world!!

    Really? Is this the best argument you coould come up with against Kinect? Then Kinect seem to be a huge success....

  • Report this Comment On November 05, 2010, at 1:27 PM, pogicraft wrote:

    Blah, not a good article. Kinect is in competition against the Move. If it sells more than Move, its great. Call of Duty is a single game hoping to sell 12 million units and should not be compared with sales of Kinect.

    While I'm skeptical on 5 million units by the end of the year, I'm encouraged at the number of people willing to pay $150 for this technology. You can compare Call of Duty to Halo Reach however, also made by Microsoft.

  • Report this Comment On November 05, 2010, at 1:45 PM, libtard wrote:

    Low light? Have you actually USED a Kinect?

    I have. Skeletal tracking (how the GAME sees your movement) works in complete darkness. Why? Because the Near IR projects floods the room with nearIR light, and the depth sensor "sees" the reflection. (This is why warm sunlight can cause tracking problems)

    The RGB camera is ONLY used for photos, video chat, and for FACIAL recognition. Kinect ID works when you sign into the hub. If it can't see your face (say in the dark)-- you can sign in manually.

    Why don't you actually USE one for a while, then get back to us?

  • Report this Comment On November 06, 2010, at 6:41 PM, Jaspers0Debt wrote:

    This is the worst of these articles you've put out Rick. How do you even begin to compare Kinect to Call of Duty? When you do how in the world do you miss that Kinect has been back-ordered on Amazon for weeks? You see how that could effect the orders coming in right? Even back ordered it's the number 3 product. That's your evidence there isn't enough demand?

    You use Consumer Reports inability to find flaw as evidence that the product is inherently flawed because they said maybe? Yet you're own cunning Amazon.com analysis fails to mention the the product gets a 4.5 star rating after over a hundred reviews. Do you think all those reviewers were fair skinned with spotlights in their entertainment rooms? Not one mentioned a low light issue.

    As of right now back ordered $150 Kinect is #3, $400 bundle is #7. The closest other piece of hardware is the $200 Red Wii bundle at #21. Yeah Kinect is doomed. The whole industry is doomed.

    You're not skeptical Rick, you're polarized. It's apparent you've been preparing to bash the Kinect (and anything else in the industry) long before it came out. Regardless of reality that's you're view and it's not changing.

    Is this rule breaking Rick? Is this Foolishness? Is this honest?

    Kinect will sell it's millions by Christmas easy. The majority of the millions of families who get one will enjoy it as the majority of Amazon reviewers have. Neither Ricks opinion nor rhetoric will change. Those are my predictions.

    ~Joseph

  • Report this Comment On November 07, 2010, at 1:21 PM, crca99 wrote:

    I appreciate the article as I always do for Mr. Munarriz. Have we gone overboard with snide intonations in our comments? Does that mean market mood is headed downward for the winter?

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