Business and marketing applications of Microsoft's Kinect technology. Trend assessment assignment for MKTG 7546 Digital Marketing course at the University of Memphis.

1. Business and Marketing
Applications of Microsoft’s
Kinect Technology
MKTG 7546 – Trend Assessment
Kyle Drummer
February 13, 2012

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I. The Decline of Physical Controls
Since the first home video game system, the Magnavox Odyssey, was launched in 1972, players
have used physical devices to control their movements in the video game world (Time Magazine
n.d.). The consoles have been updated with improved graphics, increased controller buttons and
more games over the decades but one thing has remained constant – the necessity of a physical
controller. In 2010, an electronics company would create a device that not only changed video
game consoles but potentially the business world.
On November 4, 2010, Microsoft launched a natural user interface (NUI) system named Kinect
for their Xbox 360 video game system (Microsoft Corporation 2010). Kinect is a technology
that allows the individual to use their body and hands to control video games. The technology
utilizes 3D depth sensors, an RGB camera and microphones to identify and respond to a user’s
gestures and voice. Microsoft developed the technology to be a “game changer” in the video
game industry while also extending the life of their Xbox 360 console. While technologies such
as depth sensors and RGB cameras had been extremely expensive in the past, Microsoft was able
to 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. The
same 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 operating
system (Giles 2010). It took six days after the launch for a Spanish hacker to post the computer
code that allowed him to control and analyze the Kinect from his computer.
The hackers’ efforts were initially condemned by Microsoft. Microsoft issued a statement saying
that they would “work closely with law enforcement and product safety groups to keep Kinect
tamper-resistant” (Blomquist 2010). Not long after the statement was released, they released a
second 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 are
part of Kinect for Xbox 360 have not been modified. What has happened is someone has created
drivers that allow other devices to interface with the Kinect for Xbox 360. The creation of these
drivers, and the use of Kinect for Xbox 360 with other devices, is unsupported. We strongly
encourage customers to use Kinect for Xbox 360 with their Xbox 360 to get the best experience
possible. (Blomquist 2010)”
Both the hackers’ work and Microsoft’s second statement were important for businesses
everywhere because they demonstrated two key items. First, that it was possible to utilize the
Kinect for purposes beyond playing video games. Second, Microsoft realized that there is an
ancillary market for the Kinect. The secondary market created by the hackers would lead to
Microsoft investing money and time into developing a commercial application for their Windows
operating system.
After becoming the world’s fastest selling consumer electronics device, Microsoft released
Kinect for Windows on February 1, 2012 (Subbaraman 2011). For the price of $250, users can
purchase 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

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commercial applications using Kinect. This release allows businesses and developers to
integrate 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 how
consumers interact with technology.
II. A New Era of Marketing
While Kinect for Windows is extremely new, several companies used the software developed by
the hackers mentioned above and developed applications for marketing their product. Topshop,
an international clothing retailer, partnered with an augmented reality solutions company to
create 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 to
remove their clothing. The customer simply walks up, uses their hands to gesture to the outfit
that they would like to try on and drags the virtual outfit over their body. The user can turn their
body 180 degrees to view the back of the outfit as well as take a few steps backward to get a
better 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 consumers
from purchasing their products. The process of trying on virtual clothing is much more efficient
than a traditional dressing room. Consumers might be more likely to experiment with clothing
and combinations of outfits, which could result in increased sales. Although a need for a
traditional dressing room will continue to exist, consumers that value efficiency and speed of
process will appreciate the opportunities that this technology offers them in their shopping
experience.
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 their
proper size from the screen and have the virtual clothing react accordingly, Topshop’s outfits
would more accurately represent the tangible product. Another complaint is that the device
occasionally misaligns the virtual outfits, not accurately placing the clothing over the user’s body

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(Wong 2011). While no technology is perfect, improvements in clothing size accuracy and
alignment may lead more consumers to purchase the product and increase the store’s revenues.
Another clothing retailer, Nordstrom, utilized Kinect technology for their Seattle, Washington
location. Capitalizing on the technology’s ability to detect hand motions, Nordstrom created an
interactive 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 light
and was a unique way to engage customers with their brand.
It is unknown if Nordstrom deemed the Kinect display campaign a success. However, the
campaign 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) have
a tendency to be attracted novel ideas and use of technology, may have been compelled to visit
the store to simply interact with the display.
One way Nordstrom could have engaged more consumers with the display is by making better
use of social media promotion. While Nordstrom did upload a video of the display to the
YouTube, the video has attracted only 38,935 views since March 24, 2011 (Nordstrom.com
2011). Given the uniqueness of the display and the global reach of the Nordstrom brand, the
video could have garnered much more attention. A social media campaign for the Kinect display
via Facebook and Twitter could have helped the video go “viral”. For example, Nordstrom
could have directed people to their YouTube Kinect display page by sending out the link to their
friends and followers via those social media sites. This social media campaign could have
targeted 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 potential
application would be to create a virtual shopping mall, using the Kinect sensor to allow a
consumer to “walk” between stores. In this instance, a retailer such as Amazon could bridge the
gap 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 tour
the 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 consumers
could interact with 3D models of the toy that they are interested in while saving the time and fuel
of 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 luxury
resort’s property. What if you could allow the customer to walk your entire property and interact
with your highly-trained staff? If a company were to integrate Kinect with their virtual tour, it
could lead to more bookings for the property. The physical movement involved in walking a
property via Kinect would give many customers a greater awareness of the property size
compared to simply saying that a property is five square miles. A company could also integrate
staff at certain points along the tour. For example, if a customer walks into the virtual tavern, a
virtual bartender could ask if they would like to try the tavern’s signature cocktail. The potential
applications for integrating Kinect’s natural user interface are immense. Marketers have just
begun to scratch the surface of the applications. As the technology evolves and becomes more

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prevalent, a wide range of industries will turn to Kinect to increase brand awareness and
revenues.
III. “Kinected” Businesses
When examining the current Kinect applications, it is clear that the technology has the potential
to shape businesses in the future. In order to evaluate the impact of Kinect, I interviewed Joshua
Blake, OpenKinect Community Founder and author of the upcoming book Natural User
Interfaces in .NET. While the retail clothing, retail shopping and the travel industries were
discussed above, Joshua and I agree that Kinect technology has the potential to impact almost
every industry (Blake 2012). According to Joshua, “computers are so prevalent and there are
such a wide range of applications of Kinect that it’s hard to think of a segment where more
natural interactions would not help”. As computing technology becomes more powerful and less
expensive, businesses have the ability to integrate it more easily and without adding significant
cost 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 things
such as “digital signage, window displays and in-store interactions”. This mirrors where some of
the current marketing applications of Kinect have already focused their efforts. In addition to
this, Kinect has the ability to improve productivity and collaboration among groups. I believe
that a video conferencing device will be created using Kinect technology. Improved video
conferencing has the potential to increase collaboration among businesses in addition to
increasing productivity by reducing meeting travel time. One can envision a meeting involving
people and objects in three-dimensional holographic form – something that could only be shown
in a science fiction movie a few years ago.
Business marketing will also be influenced by Kinect. Joshua sees a comparison between
marketers using Kinect and a few years ago when companies were attracted to Microsoft
Surface. According to him, “many companies wanted custom applications to show off their
products with the new, cool multi-touch table” with Microsoft Surface. Marketers are constantly
searching for new ways to show off their product and attract consumers. Kinect is the one of the
latest ways that companies can use to accomplish this goal. Joshua also believes that when
Kinect becomes common-place, the interest will shift again but there will be lasting residual
effects from the technology.
In addition to businesses, the Kinect technology has the ability to impact many different
consumer segments. While the largest market segment of video game players is 18 – 49 years
old, the more intuitive Kinect user interface has the ability to reach demographics beyond that
segment (Entertainment Software Association 2011). The popularity of touch screen
smartphones such as the Apple iPhone has shown that user-friendly technology can reach a wide
range of demographics. According to a 2011 survey conducted by Nielson, 38% of all
smartphone 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 too
will the applications for it. For instance, the technology may have the ability to recognize

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individual users. Businesses would then be able to link an image of a consumer to that
consumer’s rewards card. When the consumer then walks by a display wall utilizing Kinect, the
camera can recognize the consumer and modify its display to fit that consumer’s preference. An
example of this application would be at an electronics retailer. If a consumer states his/her user
preferences as Apple products, a display wall utilizing Kinect would change to the latest Apple
products when he/she walks by it. This has the potential to more effectively market products by
targeting specific consumers.
When discussing how the Kinect technology will change going forward, Joshua believes that
there will be improved hardware specifications. These specifications will include “higher
resolutions and higher framerates in the sensors, as well as integration into different form factors
such as laptops and televisions”. Joshua also believes that “on the software side, we’ll see a
wide variety of frameworks for gesture recognition, modeling human interactions and better
computer vision techniques”. As with any software, it is gradually improved over time. Given
the relatively short timeframe that the software has been available, incredible gains have already
been made but further developments will continue to take place.
Microsoft will need to continue investing in research and development of the Kinect technology
in order to stay ahead of their competition. This research and development includes the
hardware 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”. Joshua
stated that they were initially caught off-guard when the OpenKinect community created open
source Kinect drivers. In order to prevent this from happening again, Microsoft should the
OpenKinect community as a driving force for their research and development. This community
has helped to push the capabilities of the Kinect technology and should be utilized to continue
driving innovation.
One application of Kinect that needs attention from Microsoft is its ability to be used for data
entry. Joshua states that “poorly designed Kinect interfaces can be tiring with prolonged use and
can be frustrating if it responds inconsistently”. If Microsoft wants the technology to be more
prevalent in businesses, they must address this need. Users expect software to respond exactly as
they request and will quickly move to a piece of technology that more effectively meets this
need.
Despite the current limitations of Kinect, I believe that it will be a significant technology for
businesses to leverage in the future. Industries ranging from retail shopping to tourism will see
the potential applications for it and can utilize it to market their products. As the software and
hardware evolve, Microsoft will need to leverage the open-source communities to help anticipate
the needs of the market and stay ahead of their competition. Leveraging these communities will
help them create more powerful technology while also benefiting businesses who seek to take
advantage of the technology.

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Works Cited
Bazzell, Barry. Nordstrom Installs Kinect Interactive Window Display. April 7, 2011.
http://articles.businessinsider.com/2011-04-07/tech/29974561_1_flagship-store-kinect-
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.
http://techliberation.com/2010/11/18/hacking-the-kinect-how-not-to-do-pr/ (accessed
February 6, 2012).
Bonnington, Christina. Seniors, Women Embracing Tablets, E-Readers. August 29, 2011.
http://www.wired.com/gadgetlab/2011/08/mobile-tech-demographics/ (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.
http://www.newscientist.com/article/dn19762-inside-the-race-to-hack-the-
kinect.html?full=true (accessed February 6, 2012).
Grush, Andrew. Kinect For Windows Commercial Program Launches Today. February 1, 2012.
http://www.windows8update.com/2012/02/01/kinect-for-windows-commercial-program-
launches-today/ (accessed February 11, 2012).
Julius, Jiabin. Kinect Fitting Room for Topshop. December 19, 2011.
http://julius.jiabin.net/uploads/default/files/ardoor.jpg (accessed February 5, 2012).
Microsoft Corporation. Kinect Ads: 'You Are the Controller'. October 21, 2010.
http://www.microsoft.com/presspass/features/2010/oct10/10-21kinectads.mspx (accessed
February 5, 2012).
Nordstrom.com. Nordstrom Downtown Seattle: Writing with Light . March 24, 2011.
http://www.youtube.com/watch?v=p85b87FKecU (accessed February 10, 2012).
Sterling, Bruce. Augmented Reality: Kinect fitting-room for TopShop, Moscow. May 10, 2011.
http://www.wired.com/beyond_the_beyond/2011/05/augmented-reality-kinect-fitting-
room-for-topshop-moscow/ (accessed February 5, 2012).
Subbaraman, Nidhi. Panasonic's Record $5.5 Billion Loss, Anonymous Threatens To Expose
Mexican Cartel . October 31, 2011. http://www.fastcompany.com/1791947/panasonic-
forecasts-record-55-billion-loss-disney-abc-renews-deals-with-amazoncom-and-netfli
(accessed February 3, 2012).

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Time Magazine. A History of Video Game Consoles. n.d.
http://www.time.com/time/interactive/0,31813,2029221,00.html (accessed February
2012, 5).
Wong, George. Topshop Moscow makes use of Kinect to create an augmented reality fitting
room. May 5, 2011. http://www.ubergizmo.com/2011/05/topshop-moscow-kinect-
augmented-reality/ (accessed February 5, 2012).