Tycho’s news post commenting on the new Microsoft program to sell game consoles like cell phones nails it:

Subsidizing hardware with a service charge is how you sell expensive things to people who can’t afford them, or can’t afford it all at once.  It’s about context, though: the gaming console has historically been sold to people who place a premium on its ownership.  Eventually the top part of the funnel gets wider, certainly, and prices drop.  But seeing this model here, where I live, is like finding a bear in your driveway.  What happens when you launch a console in this way?

You can look at Amazon or whatever and see that the hardware goes for $276 and up.  Obviously, you and I probably aren’t interested in such a device for our personal use: four gigs isn’t enough to copy a single disc to the local drive, reaping the benefits thereby.  The Kinect is deeply, profoundly optional as a peripheral.  It doesn’t matter, though: “we” already own the thing.  “We” have probably owned several, statistically speaking.  This box is for another type of person, and that person exists in far greater numbers than the stalwart faithful which huddle in our cloister.