Despite the continued whispers from retailers that we hear about Kinect being in limited supply at launch, Microsoft apparently now thinks that it will beat its original projection of 3 million units sold before the end of the year.

Reportedly, none other than Don Mattrick from Microsoft is quoted as saying that he expecting Kinect to now sell 5 million units before the end of the year. Considering that Microsoft is spending a truck load of cash on advertising and promoting Kinect, it isn’t surprising that more interest in the device has been generated and the buzz has picked up.

According to both chain and independent retail store managers that we spoke with, they admit that the buzz has increased in the weeks leading up to the launch, but they continue to be worried that they will have enough product to sell.

To sell 5 million units before this holiday season is going to take more than a little luck. Early reports of independent video game retailers apparently having little, if any, product on launch day is troubling. It would seem, however, that big box retailers have ample numbers of units to sell on launch day and the inventory situation will have to continue to improve if Microsoft is to achieve this projected sales number.

The other factor is, of course, actual sales. It is necessary for the buzz to translate into actual sales numbers. Should Microsoft be able to move 5 million units before the end of the year, Kinect will be off to a solid start; which should see more developers embrace Kinect and produce more software for it. We still believe that software in the end will be the key in Microsoft’s ability to sustain the growth of Kinect long-term.