Between 15 and 25 percent of Xbox 360 owners are likely to buy a Kinect motion controller in the first year, generating at least $900 million in hardware sales, according to a note from analyst Sandeep Aggarwal at Caris & Company reported by Barron’s.
Aggarwal expects Kinect will also help Microsoft sell an additional million consoles, generating about $300 million of incremental revenue. Combined with lower attrition on Xbox Live, higher subscriber growth and software sales, he comes up with the $2 billion Kinect bump.
Kinect goes on sale in November.
He’s expecting Microsoft stock to hit $37, boosted by Kinect, increased enterprise spending and Windows 7 demand.
The note also said the risk to Microsoft from Apple’s iPad is “overblown” and he expects “significant upside from Azure and Office 2010.”
Microsoft stock is up a little over 2 percent to $24.84 at last check, but there is a lot of news out of the partner conference.