Business and MarketingApplications of Microsoft’s   Kinect Technology             MKTG 7546 – Trend Assessment            ...
Drummer - Page |1I. The Decline of Physical ControlsSince the first home video game system, the Magnavox Odyssey, was laun...
Drummer - Page |2commercial applications using Kinect. This release allows businesses and developers tointegrate the Kinec...
Drummer - Page |3(Wong 2011). While no technology is perfect, improvements in clothing size accuracy andalignment may lead...
Drummer - Page |4prevalent, a wide range of industries will turn to Kinect to increase brand awareness andrevenues.III. “K...
Drummer - Page |5individual users. Businesses would then be able to link an image of a consumer to thatconsumer’s rewards ...
Drummer - Page |6                                          Works CitedBazzell, Barry. Nordstrom Installs Kinect Interactiv...
Drummer - Page |7Time Magazine. A History of Video Game Consoles. n.d.,31813,2...
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Business & marketing applications of microsoft’s kinect technology drummer


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Business and marketing applications of Microsoft's Kinect technology.

Trend assessment assignment for MKTG 7546 Digital Marketing course at the University of Memphis.

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Business & marketing applications of microsoft’s kinect technology drummer

  1. 1. Business and MarketingApplications of Microsoft’s Kinect Technology MKTG 7546 – Trend Assessment Kyle Drummer February 13, 2012
  2. 2. Drummer - Page |1I. The Decline of Physical ControlsSince the first home video game system, the Magnavox Odyssey, was launched in 1972, playershave used physical devices to control their movements in the video game world (Time Magazinen.d.). The consoles have been updated with improved graphics, increased controller buttons andmore games over the decades but one thing has remained constant – the necessity of a physicalcontroller. In 2010, an electronics company would create a device that not only changed videogame consoles but potentially the business world.On November 4, 2010, Microsoft launched a natural user interface (NUI) system named Kinectfor their Xbox 360 video game system (Microsoft Corporation 2010). Kinect is a technologythat allows the individual to use their body and hands to control video games. The technologyutilizes 3D depth sensors, an RGB camera and microphones to identify and respond to a user’sgestures and voice. Microsoft developed the technology to be a “game changer” in the videogame industry while also extending the life of their Xbox 360 console. While technologies suchas depth sensors and RGB cameras had been extremely expensive in the past, Microsoft was ableto launch Kinect for the price of $150 – thousands of dollars less than similar devices.Hackers did not wait long before attempting to gain control of this new gaming device. Thesame day that Kinect was released, Adafruit Industries, a producer of electronics kits, offered$1,000 to the first person who could successfully hack the Kinect to run on a computer operatingsystem (Giles 2010). It took six days after the launch for a Spanish hacker to post the computercode that allowed him to control and analyze the Kinect from his computer.The hackers’ efforts were initially condemned by Microsoft. Microsoft issued a statement sayingthat they would “work closely with law enforcement and product safety groups to keep Kinecttamper-resistant” (Blomquist 2010). Not long after the statement was released, they released asecond press release which softened their stance on the hackers’ efforts. In this statement,Microsoft said:“Kinect for Xbox 360 has not been hacked–in any way–as the software and hardware that arepart of Kinect for Xbox 360 have not been modified. What has happened is someone has createddrivers that allow other devices to interface with the Kinect for Xbox 360. The creation of thesedrivers, and the use of Kinect for Xbox 360 with other devices, is unsupported. We stronglyencourage customers to use Kinect for Xbox 360 with their Xbox 360 to get the best experiencepossible. (Blomquist 2010)”Both the hackers’ work and Microsoft’s second statement were important for businesseseverywhere because they demonstrated two key items. First, that it was possible to utilize theKinect for purposes beyond playing video games. Second, Microsoft realized that there is anancillary market for the Kinect. The secondary market created by the hackers would lead toMicrosoft investing money and time into developing a commercial application for their Windowsoperating system.After becoming the world’s fastest selling consumer electronics device, Microsoft releasedKinect for Windows on February 1, 2012 (Subbaraman 2011). For the price of $250, users canpurchase a Kinect sensor that integrates seamlessly with the world’s leading operating system.Microsoft also released a software development kit that will allow designers to create
  3. 3. Drummer - Page |2commercial applications using Kinect. This release allows businesses and developers tointegrate the Kinect technology with their products – without hacking the technology.Businesses of all industries will no longer be tethered to physical controls such as touch screens,keyboards and mice. The applications for Kinect technology have the potential to change howconsumers interact with technology.II. A New Era of MarketingWhile Kinect for Windows is extremely new, several companies used the software developed bythe hackers mentioned above and developed applications for marketing their product. Topshop,an international clothing retailer, partnered with an augmented reality solutions company tocreate a virtual dressing room for their Moscow store (Sterling 2011). Using the Kinect sensor,they developed a special “mirror” that allows the customer to “try on” outfits without having toremove their clothing. The customer simply walks up, uses their hands to gesture to the outfitthat they would like to try on and drags the virtual outfit over their body. The user can turn theirbody 180 degrees to view the back of the outfit as well as take a few steps backward to get abetter perspective of how the clothing looks on their body. Figure 1. Topshop Virtual Dressing Room (Julius 2011)Using this technology, Topshop is able to effectively remove barriers that may hinder consumersfrom purchasing their products. The process of trying on virtual clothing is much more efficientthan a traditional dressing room. Consumers might be more likely to experiment with clothingand combinations of outfits, which could result in increased sales. Although a need for atraditional dressing room will continue to exist, consumers that value efficiency and speed ofprocess will appreciate the opportunities that this technology offers them in their shoppingexperience.However, Topshop can work to improve their virtual dressing room in several aspects.Currently, the virtual outfits are only available in one size. If users were able to select theirproper size from the screen and have the virtual clothing react accordingly, Topshop’s outfitswould more accurately represent the tangible product. Another complaint is that the deviceoccasionally misaligns the virtual outfits, not accurately placing the clothing over the user’s body
  4. 4. Drummer - Page |3(Wong 2011). While no technology is perfect, improvements in clothing size accuracy andalignment may lead more consumers to purchase the product and increase the store’s revenues.Another clothing retailer, Nordstrom, utilized Kinect technology for their Seattle, Washingtonlocation. Capitalizing on the technology’s ability to detect hand motions, Nordstrom created aninteractive window display that allowed passersby to “write” on the display outside of their store(Bazzell 2011). As people moved their hands near the glass, text appeared to be written in lightand was a unique way to engage customers with their brand.It is unknown if Nordstrom deemed the Kinect display campaign a success. However, thecampaign had potential to attract “non-typical” Nordstrom customers to the store. For example,technology enthusiasts and young adults (who may not be the typical Nordstrom consumer) havea tendency to be attracted novel ideas and use of technology, may have been compelled to visitthe store to simply interact with the display.One way Nordstrom could have engaged more consumers with the display is by making betteruse of social media promotion. While Nordstrom did upload a video of the display to theYouTube, the video has attracted only 38,935 views since March 24, 2011 (Nordstrom.com2011). Given the uniqueness of the display and the global reach of the Nordstrom brand, thevideo could have garnered much more attention. A social media campaign for the Kinect displayvia Facebook and Twitter could have helped the video go “viral”. For example, Nordstromcould have directed people to their YouTube Kinect display page by sending out the link to theirfriends and followers via those social media sites. This social media campaign could havetargeted users in the Seattle area in order to drive foot traffic to their store.Beyond the retail clothing industry, the potential uses of Kinect are vast. One potentialapplication would be to create a virtual shopping mall, using the Kinect sensor to allow aconsumer to “walk” between stores. In this instance, a retailer such as Amazon could bridge thegap between physical store locations and e-commerce by integrating the Kinect technology.Instead of driving to a mall to purchase products or browsing a website, a consumer could tourthe virtual mall environment, stopping at jewelry kiosks, clothing stores and toy stores alike.Amazon could lease space to the stores, increasing their revenues while allowing their “tenants”to gain access to a larger audience than the consumers in a particular market. The consumerscould interact with 3D models of the toy that they are interested in while saving the time and fuelof driving to a physical store location.The tourism industry could also utilize Kinect technology to market their offerings to consumers.Currently, consumers depend upon small, virtual tours and 2D photographs to view a luxuryresort’s property. What if you could allow the customer to walk your entire property and interactwith your highly-trained staff? If a company were to integrate Kinect with their virtual tour, itcould lead to more bookings for the property. The physical movement involved in walking aproperty via Kinect would give many customers a greater awareness of the property sizecompared to simply saying that a property is five square miles. A company could also integratestaff at certain points along the tour. For example, if a customer walks into the virtual tavern, avirtual bartender could ask if they would like to try the tavern’s signature cocktail. The potentialapplications for integrating Kinect’s natural user interface are immense. Marketers have justbegun to scratch the surface of the applications. As the technology evolves and becomes more
  5. 5. Drummer - Page |4prevalent, a wide range of industries will turn to Kinect to increase brand awareness andrevenues.III. “Kinected” BusinessesWhen examining the current Kinect applications, it is clear that the technology has the potentialto shape businesses in the future. In order to evaluate the impact of Kinect, I interviewed JoshuaBlake, OpenKinect Community Founder and author of the upcoming book Natural UserInterfaces in .NET. While the retail clothing, retail shopping and the travel industries werediscussed above, Joshua and I agree that Kinect technology has the potential to impact almostevery industry (Blake 2012). According to Joshua, “computers are so prevalent and there aresuch a wide range of applications of Kinect that it’s hard to think of a segment where morenatural interactions would not help”. As computing technology becomes more powerful and lessexpensive, businesses have the ability to integrate it more easily and without adding significantcost to their products.The business landscape will be impacted by Kinect in a variety of ways. First and foremost,business-to-consumer interactions will improve. Joshua stated that this would include thingssuch as “digital signage, window displays and in-store interactions”. This mirrors where some ofthe current marketing applications of Kinect have already focused their efforts. In addition tothis, Kinect has the ability to improve productivity and collaboration among groups. I believethat a video conferencing device will be created using Kinect technology. Improved videoconferencing has the potential to increase collaboration among businesses in addition toincreasing productivity by reducing meeting travel time. One can envision a meeting involvingpeople and objects in three-dimensional holographic form – something that could only be shownin a science fiction movie a few years ago.Business marketing will also be influenced by Kinect. Joshua sees a comparison betweenmarketers using Kinect and a few years ago when companies were attracted to MicrosoftSurface. According to him, “many companies wanted custom applications to show off theirproducts with the new, cool multi-touch table” with Microsoft Surface. Marketers are constantlysearching for new ways to show off their product and attract consumers. Kinect is the one of thelatest ways that companies can use to accomplish this goal. Joshua also believes that whenKinect becomes common-place, the interest will shift again but there will be lasting residualeffects from the technology.In addition to businesses, the Kinect technology has the ability to impact many differentconsumer segments. While the largest market segment of video game players is 18 – 49 yearsold, the more intuitive Kinect user interface has the ability to reach demographics beyond thatsegment (Entertainment Software Association 2011). The popularity of touch screensmartphones such as the Apple iPhone has shown that user-friendly technology can reach a widerange of demographics. According to a 2011 survey conducted by Nielson, 38% of allsmartphone owners are over the age of 45 (Bonnington 2011). This data shows that simple, user-friendly software is more appealing to an older demographic. With no physical controller,Kinect is much more innate and appealing to this older demographic.As Kinect technology evolves to more powerful cameras and improved object recognition, so toowill the applications for it. For instance, the technology may have the ability to recognize
  6. 6. Drummer - Page |5individual users. Businesses would then be able to link an image of a consumer to thatconsumer’s rewards card. When the consumer then walks by a display wall utilizing Kinect, thecamera can recognize the consumer and modify its display to fit that consumer’s preference. Anexample of this application would be at an electronics retailer. If a consumer states his/her userpreferences as Apple products, a display wall utilizing Kinect would change to the latest Appleproducts when he/she walks by it. This has the potential to more effectively market products bytargeting specific consumers.When discussing how the Kinect technology will change going forward, Joshua believes thatthere will be improved hardware specifications. These specifications will include “higherresolutions and higher framerates in the sensors, as well as integration into different form factorssuch as laptops and televisions”. Joshua also believes that “on the software side, we’ll see awide variety of frameworks for gesture recognition, modeling human interactions and bettercomputer vision techniques”. As with any software, it is gradually improved over time. Giventhe relatively short timeframe that the software has been available, incredible gains have alreadybeen made but further developments will continue to take place.Microsoft will need to continue investing in research and development of the Kinect technologyin order to stay ahead of their competition. This research and development includes thehardware upgrades discussed above as well as improved software. According to Joshua,Microsoft needs to “anticipate what the market needs will be rather than be reactionary”. Joshuastated that they were initially caught off-guard when the OpenKinect community created opensource Kinect drivers. In order to prevent this from happening again, Microsoft should theOpenKinect community as a driving force for their research and development. This communityhas helped to push the capabilities of the Kinect technology and should be utilized to continuedriving innovation.One application of Kinect that needs attention from Microsoft is its ability to be used for dataentry. Joshua states that “poorly designed Kinect interfaces can be tiring with prolonged use andcan be frustrating if it responds inconsistently”. If Microsoft wants the technology to be moreprevalent in businesses, they must address this need. Users expect software to respond exactly asthey request and will quickly move to a piece of technology that more effectively meets thisneed.Despite the current limitations of Kinect, I believe that it will be a significant technology forbusinesses to leverage in the future. Industries ranging from retail shopping to tourism will seethe potential applications for it and can utilize it to market their products. As the software andhardware evolve, Microsoft will need to leverage the open-source communities to help anticipatethe needs of the market and stay ahead of their competition. Leveraging these communities willhelp them create more powerful technology while also benefiting businesses who seek to takeadvantage of the technology.
  7. 7. Drummer - Page |6 Works CitedBazzell, Barry. Nordstrom Installs Kinect Interactive Window Display. April 7, 2011. seattle (accessed February 8, 2012).Blake, Joshua, interview by Kyle J Drummer. OpenKinect Community Founder, Microsoft Surface MVP, Author - Natural User Interfaces in .NET (February 10, 2012).Blomquist, Cord. Hacking the Kinect & How Not to do PR. November 18, 2010. (accessed February 6, 2012).Bonnington, Christina. Seniors, Women Embracing Tablets, E-Readers. August 29, 2011. (accessed February 10, 2012).Entertainment Software Association. 2011 Sales, Demographic and Usage Data: Essential Facts About the Computer and Video Game Industry. Sales, Demographic and Usage Data, Washington, DC: Entertainment Software Association, 2011.Giles, Jim. Inside the race to hack the Kinect . November 23, 2010. kinect.html?full=true (accessed February 6, 2012).Grush, Andrew. Kinect For Windows Commercial Program Launches Today. February 1, 2012. launches-today/ (accessed February 11, 2012).Julius, Jiabin. Kinect Fitting Room for Topshop. December 19, 2011. (accessed February 5, 2012).Microsoft Corporation. Kinect Ads: You Are the Controller. October 21, 2010. (accessed February 5, 2012) Nordstrom Downtown Seattle: Writing with Light . March 24, 2011. (accessed February 10, 2012).Sterling, Bruce. Augmented Reality: Kinect fitting-room for TopShop, Moscow. May 10, 2011. room-for-topshop-moscow/ (accessed February 5, 2012).Subbaraman, Nidhi. Panasonics Record $5.5 Billion Loss, Anonymous Threatens To Expose Mexican Cartel . October 31, 2011. forecasts-record-55-billion-loss-disney-abc-renews-deals-with-amazoncom-and-netfli (accessed February 3, 2012).
  8. 8. Drummer - Page |7Time Magazine. A History of Video Game Consoles. n.d.,31813,2029221,00.html (accessed February 2012, 5).Wong, George. Topshop Moscow makes use of Kinect to create an augmented reality fitting room. May 5, 2011. augmented-reality/ (accessed February 5, 2012).