If analyst Michael Pachter is to be believed - and bear in mind that he outed the new Twisted Metal despite David Jaffe's denials - then Microsoft's Kinect controller costs the company $70 to make.
“We think that if Microsoft prices Kinect close to cost (which we estimate to be around $70), it will see a very high attach rate, with the potential to drive $200 – 400 in lifetime value from each Kinect household. On the other hand, it is equally logical to charge a very high price for the device, especially if it is expected to be supply-constrained", says Pachter in a recent advisory note to investors.
So, why hasn't Microsoft matched Sony with its Move controller announcement
by actually announcing a retail price - so far expected to be around $150
"Microsoft did not announce a price point for Kinect. We think that the company is struggling with a pricing strategy, as it is logical to argue that the lifetime value of a customer is quite high, due to the user-friendliness of the device", this is Mr Pachter's guess.