Webbush Morgan analyst Michael Pachter, one of the most recognized game’s analysts, predicts that Microsoft will launch Natal at a $50 price point this Fall.

He thinks that Microsoft won’t be making money initially with the motion sensing controller, as he thinks it costs Microsoft anywhere from $50 to $80 to manufacture the hardware.

Microsoft will launch the Natal (which is still a codename) motion sensing controller this Fall.

Bungie has confirmed that Halo Reach won’t be using Microsoft’s Natal motion controller, and will rely solely on the classic Xbox 360 controller layout. The obvious reason for this is that Natal will take over 10% of the Xbox 360 CPU, and for a game like Halo Reach, which will utilize every available resource, it’s quite a lot to ask for.

Yeah, we know the deal: companies always hype up their upcoming products and product launches, and according to Microsoft’s Aaron Greenberg, there will be millions of Natals sold this holiday season, quite a large figure, considering that Microsoft sold 2 million Xbox 360 consoles last holiday season. Talk about hype, especially considering that “natal” is still a code name.

In order to cut costs on the device, Microsoft has dropped the internal CPU of Natal, instead relied on software to render the motion and sensor movement on the Xbox 360 CPU. This is quite problematic, as, according to Microsoft themselves, consumes 10-15 percent of the CPU power of the Xbox 360. Meaning, if a game uses close to 100% of the CPU, don’t expect it to have Natal integration. And Microsoft doesn’t either, as they’d rather see new games being developed for the system than updates of current games to take advantage of the motion controls.

In a press release which followed up on Microsoft’s CES keynote, the company promises to deliver Natal, its motion controller/camera eye to the market for the Holiday Season 2010, the usual busy time for games and where all the great stuff happens. However, they still mention “Natal” as a codename, and not the official name of the controller. Hopefully we’ll have that at E3.

MIcrosoft is gearing up for a big push when they release Project Natal, their own motion-sensing offering. Minor peripherals or controller upgrades aren’t usually big affairs, but this is the Xbox’s foray into a new direction, what many say might be the next evolution of video games. Many alternate control peripherals fail due to inadequate support. You pick up the game that came with it, play it til you’re tired of it and then hunt through the shelves for something else to use with it, only to find there isn’t anything else. Sales of the peripheral slump and developers don’t even bother consider creating games for the device.

That’s why Microsoft isn’t planning on releasing the new controller until they think its ready and has a good lineup of launch titles to get people using it. They’ve got Rare working on games for the device, though fans are concerned given some of the unimpressive 360 launch titles the developer put out in the past.

Microsoft claims they’re not going after the casual gaming market or any other existing market segment with the Natal. They’re aiming to get people who still aren’t gaming into the mix, claiming that for many the controller is a barrier which they hope to eliminate by making all the controls dependent upon simple body motion. At this point it seems unlikely that they’ll get too many more people involved. There’s still a big portion of the populace who consider video games and anti-social waste of time.