Microsoft positioning item as 'must have' for holidays

Cementing its status as one of the year’s “must have” holiday items, Microsoft’s Kinect has sold more than 1 million units in its first 10 days on the market.

That’s a strong start for the peripheral, which uses motion capture technology to let players use their bodies to control videogames on the Xbox 360. It’s certainly a stronger reaction than Sony saw with its entry in the motion control category earlier this year. The company shipped 1 million PlayStation Move units to retailers in that device’s first month on shelves, but did not sell them all.

Microsoft raised its sales forecast for Kinect immediately prior to launch. The company now expects to sell 5 million units before the end of the calendar year, instead of the 3 million initially projected.

Microsoft is hoping to broaden the Xbox 360′s audience with Kinect, making it more attractive to the casual gamer — a niche Nintendo has been particularly successful in luring with this console generation.

Kinect uses a 3D camera to monitor players’ movements and voice, turning those into commands that affect the action on screen — basically transforming the human body into a game controller. Titles for the system retail for $50 each — $10 less than traditional Xbox 360 games and more in line with what Nintendo charges for Wii titles.

Microsoft is betting big on the peripheral, giving its launch the same attention it would give a new console system. Rather than targeting core gamers, though, with action and role-playing titles, Kinect games revolves around fitness, dance, sports and kart racing.

Re-engaging the casual audience is critical for the company. While core games have continued to perform fairly well for the Xbox 360 in the recession, casual titles have lost steam, and the mass audience still seems to prefer Nintendo.

If Microsoft is able to spur those players to pick up an Xbox 360 with Kinect, it could see a sales boost that gives the system a significantly longer lifespan – and lets it close the gap on the Wii’s wide lead.

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