Re: Microsoft has an identity crisis.
Speaking anecdotally, the problem with the Kinect was: it isn't fun. Every title I played pretty much controlled itself while I attempted vainly to impart some sort of input. I'm not a fan of the franchise so perhaps that colours my judgement, but the Star Wars XBox 360 pack-in was the worst that I tried. It had a racing segment in which I discovered that as long as I held my arms in front of me, the vehicle would successfully complete a lap. Turning them sometimes made a difference, sometimes didn't.
So it was very similar to the Youtube experience of watching somebody else play a game, except that I wasn't allowed to sit down.