Inside sources close to the matter have said that the build costs of Kinect are near $150. When you add up all the time to write the software and the costs of the hardware, it gets expensive. This has many people at Microsoft concerned.
Usually Microsoft takes a loss on their consoles in hopes of making money on the software and add ons. With Kinect, there is no exception, says a “A highly-positioned, trusted source“. Microsoft is betting that Kinect will have more people running to the stores to buy bundles including a new Xbox.
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