Dear Microsoft: About Project Natal's Pricing...

Dear Microsoft,

We have a complicated relationship, but I went to bat for you on Natal. But Edge reported yesterday that current Xbox 360 owners should expect to pay $149 for their Project Natal accessory. New Xbox Arcade units (currently $199) bundled with Natal would cost $299.

To be honest, this price doesn't surprise me. In fact, I placed a bet with my brother that the Natal accessory would hit at a hundred and fifty bucks. But being able to predict Microsoft's greed is not the same as advocating for their pricing model. Put simply, $150 for Natal is a stupid price.

Seriously, Microsoft? You've developed this brand-spankin' new camera that is supposed to forge this seamlessly-controlled marriage between the casual gamer and the Xbox. Okay, I think I'm with you there. And somehow, you've actually gotten some of the hardcore demographic interested in Natal. Alright, that's good...

Except NEITHER of these two groups want to pay a hundred and fifty bucks for it.

The Casual Gamer

Let's start with the casual market. They're currently letting their Wii systems collect dust. We know they won't pay $150 for an accessory; Nintendo tried and failed with their horribly misguided $60 Wii Speak accessory - and at least that thing came with Animal Crossing!

But what about the casual gamers that don't yet own Xbox systems? Are they gonna show up in massive lines for the $299 '"Xbox Arcade+Natal" bundle? No, because it's THREE HUNDRED DOLLARS. The magical price point for mainstream adoption of technology is $199. This has been proven time and again every Christmas, even to the extent that Apple has consistently delayed new features on its iPods specifically to be able to hit that $199 price point. Raising your introductory Arcade system to $299 is absurd. Even if you suddenly give the Arcade the hard drive it's needed since birth, it'll look like a joke next to the blu-ray packing, 250GB PS3 Slim that consumers will be able to get at that same price point. Yes, I'm aware that Sony is introducing their "Move" camera accessory soon, and that won't be free either. But the poorly-informed casual consumer who considers buying an Arcade bundle will have a hard time thinking he's getting a good deal when Sony's throwing in a Blu-ray player, an almost-certainly bigger hard drive, and a Sony camera accessory that will likely be marketed as an equal rival to Natal. 

Even if Sony completely screws up on their own pricing of PS3+Move bundles, a $299 basic Xbox Natal bundle will still be competing pretty heavily with the $199 Wii, which is already being bundled with Wii Motion Plus and both Wii Sports collections. And it could very likely receive another price drop this year. The Wii is still selling like crazy for a four-year old console, and it could see a major resurgence this Christmas (we won't know what Nintendo has in store for its holiday season until E3). And God help if you Oprah gets behind the Wii's upcoming heart rate monitor (see right).

The Hardcore Gamer

First off, we're going to assume the average hardcore gamer isn't going to buy a new Xbox this Christmas because statistically, they probably already have one. This group is still pretty split between people who are afraid that Natal will suck, and people who already 'know' Natal will suck. The latter won't even consider buying Natal until at least a year AFTER Natal has launched - and that's assuming the Natal games are persuasive enough to change their hearts after the first year. If Microsoft doesn't show a hardcore title off at E3 that makes good on Natal's promise, expect a major Natal boycott from most of the hardcore group. Being forced to invest an extra $150 in their aging Xbox 360 is already tough sell; it'll be downright impossible if the best thing you can offer is that stupid dodgeball demo.

Stop Being Microsoft!

Microsoft, you just don't have the credibility among consumers to cram stupidly-priced products down their throats: PocketPCs, stylus-operated laptops, Windows-powered media centers, and PlaysForSure DRM are just a handful of examples demonstrating some of your catastrophic misreads on what people want. One word: Vista.

The point is, if you really want to win over Nintendo's casual crowd, try being more like Nintendo and less like Microsoft from the 90's:

• Aim for lowering prices, not raising them half-way through your console's life cycle.
• Put out hardware that doesn't put owners in mortal fear of red LEDs.
• Consider the possibility that your innovations won't be accepted until the next generation. The Wii-mote was originally conceived as a Gamecube accessory halfway through its life cycle. If Nintendo had gone that route instead of patiently reserving it for their "revolutionary" Wii, the 'waggling' casual market would never have been discovered.

Lastly, we're a half year away from Natal's launch...Change that ridiculous name into something that the casual idiot can actually pronounce correctly! This shouldn't be so difficult! GAHHH!

Love,

-Aaron-