Demand seen high for Microsoft Kinect gaming system

Wed Nov 3, 2010 7:25pm EDT

SEATTLE/NEW YORK (Reuters) - Microsoft Corp is expecting to sell 5 million of its new controller-free Kinect gaming systems this holiday shopping season, potentially adding $750 million to the software company's revenue this quarter.

The $150 device, which plugs into Microsoft's Xbox gaming console and allows users to play games simply by using gestures and voice commands, goes on sale at midnight in 30,000 stores across the United States.

Microsoft is hoping to challenge Sony Corp's Move and Nintendo Co's Wii in the expanding motion-based gaming market, and reinvigorate the $60 billion global video game industry, which has been hit hard by the economic downturn.

In September, the company forecast 3 million Kinect sales, but the head of Microsoft's entertainment unit Don Mattrick raised the projection to 5 million in an interview with Reuters on Wednesday.

"Presales have exceeded expectations," said Mattrick. "People are coming to us and saying this is must-have holiday item."

High demand for the Kinect may lead to shortages, Mattrick warned, which could crimp sales.

"We're anticipating that some of our partners will be sold out at points of time this holiday, and that's something we'll do our best to work through," he said.

There will be midnight events at 5,000 U.S. stores to mark the launch of the new product. By late-afternoon, about 100 people had formed a line outside Toys R Us in New York's Times Square, where Microsoft is holding a splashy launch and is giving away free games to early customers.

Overall, more than 30,000 U.S. stores will sell Kinect, including branches of Wal-Mart Stores Inc, Target Corp, Best Buy Co Inc, GameStop Corp and online at It goes on sale on November 10 in Europe and November 18 in Asia.   Continued...

<p>Attendees play Kinect Adventures for Microsoft Xbox in an enclosed booth at the E3 Media &amp; Business Summit in Los Angeles June 16, 2010. REUTERS/Phil McCarten</p>