Microsoft has finally removed the Kinect as a mandatory bundle and dropped the price of the hardware, which has already had a positive impact on the hardware's sales. At Gamescom Microsoft announced three new bundles, complete with games. And of course not a single one comes with the Kinect.
It's time to admit that the peripheral is dead. PR will hem and haw about how it's still an important part of Xbox's strategy, and a few games that were already in production will be released in the next year or so, but that's it. There's no value proposition for picking it up on its own, and there's no reason to develop for it when the potential audience will likely stay static.