Microsoft's first statement on the success of Adafruit's contest was filled with dark foreboding, promising the company would " work closely with law enforcement and product safety groups to keep Kinect tamper-resistant."
A later clarification said OpenKinect was not a hack, but that the new code is not supported and people should use the Kinect as intended, only with the XBox.
There are two reasons for the possible back-down:
Microsoft lawyers recognized it has no legal case against Martin, who made no changes to the hardware.
Microsoft marketers realized that the drivers might, in the end, be a gold mine for Microsoft.
Microsoft has been anxious for something to challenge the dominance of Nintendo's Wii, and it looks increasingly like Kinect is it. The company has admitted that users of its XBox Live online service spend only 60% of their time playing games, and that the company was able to raise its price on the service by 20%.
The alternative uses include innocent pleasures like watching movies on Netflix, listening to music through Microsoft Zune, and using social networking sites like Facebook.
"Everything we've been shipping has been selling," a Microsoft executive told a conference attended by CNET's Josh Lowenstein. Most retailers are sold out of the Kinect controller, he said.
Given all that it seems foolish from a business as well as a legal perspective to go to court against Martin or Adafruit. Microsoft, whose stock has been stuck in a trading range for a decade while Apple has passed it in market cap, may finally be poised for a break-out.
If the engineers want to close off the open source uses of Kinect later, in order for Microsoft to gain more control over those markets, there is time for that. For now Steve Ballmer looks set to relax and enjoy a Merry Christmas.