Microsoft confirmed what hardly has been a secret – the price of its Kinect controller system as well as the Xbox 360 – Kinect bundle with an upgraded version of the Xbox 360 Arcade. Sony will have a tough time keeping the PS3 in play in 2011 as Microsoft is going after a market the Wii has opened for Microsoft. We are now certain that it is too late for Sony to catch up with Microsoft and Nintendo and the company may want to think about a next-generation Playstation 4.

I can already imagine the nasty comments and emails I will get for this article. In the end, PS3 and Xbox 360 gamers are passionate about their hardware and tend to go a bit overboard when they are showing their support for their product. But before you write, spend the time and read through the article. Microsoft has played the console game very well over the past two years and is positioned to win the current-gen console race at least in the U.S. The PS3 is too far behind and does not have what it takes to catch up and Nintendo’s luck at this time is that it has a huge installed base it can fight over.

Microsoft said that Kinect will, in fact, cost $150 when it becomes available on November 4. It will also offer a bundle with a 4GB Xbox 360 and the Kinect controller for $300. The 4 GB Xbox 360 will cost $200 by itself. The pricing puts Microsoft right against the $200 Wii on the low end. It offers a mid-level product with the new controller system for $300 and a high-end system for $450 ($300 Xbox 360 250 GB and the $150 Kinect). For comparison purposes, the cheapest PS3 currently sells for $300 (120 GB), while the 250 GB model sells for $350.

While Kinect will appeal to an entirely different gamer than Playstation Move initially, Microsoft has the price advantage: Those who want a new controller system, can get it for $300 at Microsoft, while a comparable (4-player) system will cost about $700 at Sony (PS3 + Move). I previously wrote about the fact that Sony has a problem explaining the functionality of Move, while Kinect is relatively simple to understand. Price and understanding of the two controller systems seem to be reflected in pre-sales at Amazon already: Microsoft’s Kinect ranks #9 in the store’s video games bestseller ranking, while Sony’s Move starter bundle is at #248 (Move controller at #240 and Navigation controller at #209). The Xbox 360-Kinect bundle is listed at #69, while the PS3 Move bundle is at #1546.

The regular Xbox 360 (250 GB) is ranked #12, followed by the black Wii at #15 and the 120 GB PS3 at #18. Judging by Amazon’s rankings alone, the PS3 could use a bit more traction. Since Kinect was announced, Kinect consistently ranked higher on Amazon than any PS3 Move product. That doesn’t mean that Move is a bad system. But apparently, it just does not have the consumer appeal of Kinect.

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Kinect and Move are not just new accessories. They are product refreshes that are designed to fuel hardware and software sales in the second half of the life cycle of the Xbox 360 and PS3. The first half went to Nintendo’s Wii, but we currently see an acceleration in PS3 sales and strong gains for the Xbox 360.

According to NPD, Microsoft sold 451,700 Xbox 360 consoles in June. Sony sold 304,800 PS3s and Nintendo 422,500 Wiis in the same time frame. Microsoft has sold 20.8 million Xbox 360s in the U.S., Nintendo 30.0 million Wiis and Sony 12.9 million PS3s. If Nintendo’s numbers are correct, then it appears that the Wii is, in fact, surrendering market share to the Xbox 360 and the PS3. The Wii currently holds a share of 47.16%, which is down from 48.0% at the beginning of this year. Microsoft is up to 32.58% from 32.40% and Sony is up to 20.25% from 19.52%  (see the charts in our slideshow.)

If we look at the race between the Xbox 360 and the PS3, then it is stunning how the older Xbox 360 is increasing its distance to the PS3. When the PS3 was launched, the Xbox 360 was 3.41 million units ahead. Today, the Xbox 360 is 7.86 million units ahead. Since the beginning of this year, the Xbox 360 has extended its lead by 299,800 units, according to NPD. Microsoft could not ask for a better scenario than the current market, which clearly favors the Xbox 360 over the PS3 at this time. The company is even challenging the Wii and may be in a position to attract Wii gamers who are looking for an upgrade. Microsoft has taken much better care of its hardcore gamer base, which may be key to extend the general gaming market the Wii has opened. If Nintendo cannot find a way to appeal to hardcore gamers more effectively, it may even be at risk to lose some of its users to Microsoft.

As it stands, Sony would need a miracle to increase the interest in its Move system. Current sales numbers are not speaking in favor of the PS3. Move is too expensive and too difficult to explain. 3D may be a differentiator, but it is too far out as consumers just purchased LCD or LED TVs and may not want to sink extra money into a new 3D TV. Conceivably, Sony’s only differentiators are Blu-ray and higher quality graphics, which, however, isn’t exactly clear to the consumer at this time, especially since we heard that 3D takes the PS3 graphics engine to its limits. Blu-ray isn’t a big deal anymore since we can get players for less than $100 these days.

We here at ConceivablyTech believe that Microsoft has outmaneuvered Sony with Kinect – if Kinect works as Microsoft has promised and if there are no unforeseen hiccups. To be able to compete in sales numbers, the PS3 would need to announce a massive price drop for the Move system that would put a 4-player system into the $200 neighborhood – which is rather unlikely. The PS3 is still expensive to manufacture and Sony seems to be stuck with no way out. Even our managing editor, Wolfgang Gruener, who is in love with his PS3, admits that the time for the PS3 may have run out (he still waits for GT5, though.) We would not be too surprised if PS4 news emerged as early as mid 2011.

It will be interesting to see how Nintendo will react to Kinect. At this time, it appears that the company is trying to protect its huge installed base with new games and stronger support for third party developers. However, the current Wii looks rather old next to the refreshed Xbox 360 and PS3. A Wii 1.5 certainly would not hurt.

We said it before and we say it again: The Xbox 360 is the console to beat.

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