The video game industry is very interesting in that its sales progression comes in waves lasting for several years. It starts with exciting new hardware that drives the sale of software and in so doing creates a tidal wave of sales that lasts until the invention of new hardware.
At the height of the wave (think Wii three years ago) the video game industry cannibalizes sales from the toy industry. The last wave subsided and the toy industry as a result, has benefited from the lack of compelling competition for consumer dollars.
That could change if Microsofts new “Kinect” takes off. Here is how The Economic Times in an article entitled “With Kinect, Microsoft aims for a game changer” puts it:
Microsoft has one-upped Sony and Nintendo by eliminating game controllers and their often nightmarish bounty of buttons. Kinect peers out into a room, locks onto people and follows their motions. Players activate it with a wave of a hand, navigate menus with an arm swoosh and then run, jump, swing, duck, lunge, lean and dance to direct their on-screen avatars in each game…Kinect also understands voice commands. People can bark orders to change games, mute the volume or fire up offerings, like on-demand movies and real-time chatting during TV shows that flow through the Xbox Live entertainment service.
Kinect is an add-on to the Xbox that will sell for $150. Microsoft has not done well in recent years introducing new products but Kinect sounds like it could be a winner. If it is, batten down the hatches, because their could be a big wave coming.