Microsoft's New Marketing Strategy for the Kinect System

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IB Economics 1

Economics Article:Microsoft’s new marketing strategy for the Kinect System


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The article tells us that 'Microsoft is to open up its Xbox Kinect technology to allow amateur software developers to experiment with it.’ This decision on behalf of Microsoft could be for a number of reasons, and relates closely to what we studied in our last class, Bryan Caplan’s “Existence, Enhancement, CPI Bias, and Progress”. Caplan writes, ‘Merely bringing new inventions into existence typically has little economic benefit; the subsequent enhancement is where most of the value lies.’

This relates to the article and Microsoft’s decision to allow open-development of the Kinect system as by doing so they not only increase popularity for their product, but they open up 2 entirely new markets in doing so. This clearly shows an example of economic benefit brought-on by subsequent enhancement rather than simply a new invention. Craig Mundie, Microsoft's chief research and strategy officer put simply: "As breakthrough technologies like these reach scale, the resulting creativity and invention will open up a whole new world of possibilities for computing".

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What he means is that with the up-coming spring release of their ‘software development kit’ they have found a way to release yet another product to consumers. This product (since it is a tool to make even more products) is therefore increasing economic wealth even more as new software engineers that don’t necessarily work for Microsoft are creating goods for their open-platform, and they themselves are therefore entitled to the wealth their new software is sold for.

The quote, “Microsoft is hoping that an army of smarter developers will now find more ways to take Kinect to the next level.” ...

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