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Elite Won't Replace Premium or Core Skus 158

Posted by Zonk
from the get-thee-behind-me dept.
As the day has progressed, more information about the 'Elite' has become available. GamesIndustry.biz is reporting that the other two 360 skus will still be available. The Elite is not replacing either of them. Interestingly, there's no word on a price drop for them either. Major Nelson's most recent podcast has several interviews and details about the new offering, which you may find informative. There's more analysis available, if you find that interesting: CVG wonders aloud who is going to buy this thing, while a Wedbush Morgan analyst mentioned to GamesIndustry.biz that he thinks this validates the PS3 strategy. "'It appears to me that Microsoft sees the writing on the wall - Blu-ray is going to win the format wars ... Ultimately, Microsoft will likely offer a Blu-ray drive with the 360 Elite, and I think consumers will be able to select based solely upon other drivers.' Pachter also believes that although the Xbox 360 Elite will register with early adopters of hi-def content, the current 20GB model will still be sufficient for many consumers."
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Elite Won't Replace Premium or Core Skus

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  • What is to stop me from buying a Core 360 and a 120GB HDD? If you don't care about HDMI, where's the value in the Elite SKU?
    • by trdrstv (986999) on Wednesday March 28, 2007 @03:44PM (#18519429)
      What is to stop me from buying a Core 360 and a 120GB HDD? If you don't care about HDMI, where's the value in the Elite SKU?

      The core doesn't have a headset, and comes with composite cables, not the composite/component of the premium & elite. That and... it's black. Once you go black, you never go back.

      • by krakelohm (830589)
        Darker the meat... sweeter the treat baby.
      • Re: (Score:3, Funny)

        where's the value in the Elite SKU?

        If you believe in yourself, stay in drugs, drink your sku, and don't do milk, you'll go somewhere.
      • by brjndr (313083)
        The core also has a wired controller, not wireless. It can support wireless, it just doesn't come with one.
      • Re: (Score:2, Informative)

        by dnahelix1 (1060308)
        Plus, the hard drive is 179. So, you have the core at 300 + the 179 hard drive. = Elite + headset + wireless controllers
    • by MarkAyen (726688)
      If you don't care about HDMI (or paying separately for the larger drive), then there is effectively no advantage to buying the Elite SKU.
    • by tourvil (103765)

      What is to stop me from buying a Core 360 and a 120GB HDD? If you don't care about HDMI, where's the value in the Elite SKU?

      The 120GB HDD is being sold separately for $180. Core + HDD = $300 + $180 = $480, the same price as the elite. Why would you not buy the elite if you wanted a new 360 with the 120GB HDD?

      So for everyone wondering why the hell MS is pricing the 120GB HDD accessory so high, there's why. They don't want people just picking up a core and upgrading them for cheaper than the elite.

      • Whoops! For some reason I thought the 120GB HDD was priced at $120. Thanks for clearing that up. The Elite SKU makes more sense, then.
        • by antek9 (305362)
          No, it doesn't. When was the last time you bought a 120 Gig HDD for 180$, external or not? Like, 2004? It's political pricing, of course.
    • Buying a core ($300) and the 120 gb HD ($180) is about the same price as an Elite, give or take 10 dollars. But if you buy the core and the HD, not only will you not get HDMI, you won't get a wireless controller (you'll get a wired one), a voice chat headset for Xbox Live, an ethernet cable (no big whoop, I guess) or component cables (the Core only comes with an old school composite RCA cable, not the dual composite/component that the Premium and Elite have).

      So the Elite is really a better option for the v
  • by Anonymous Coward on Wednesday March 28, 2007 @03:46PM (#18519445)
    Is everyone suddenly a merchandiser or something? I'll replace your sku.
    • Re: (Score:3, Funny)

      by Anonymous Coward
      Sku you!
    • ...just not a common term for it.

      http://www.google.ca/search?hl=en&q=define%3A+sku& btnG=Google+Search&meta= [google.ca]

      and if you look in the results ...

      A uniquely identifiable line within a product range. A particular product may have many different variation s eg 20 percent extra free, price marked etc. each of these variation would be a unique SKU.
      www.applause.hu/terms_e.htm

      but i will agree that SKU is generally used to refer to the code of the product, not the product itself.
      • Re:its a SKU ... (Score:5, Informative)

        by badasscat (563442) <basscadet75.yahoo@com> on Wednesday March 28, 2007 @05:08PM (#18520495)
        ...just not a common term for it.

        SKU stands for "stock keeping unit". It has an actual meaning and proper use, but it's always struck me as ludicrous to use it outside of a store stockroom.

        When I was in high school (and this was 20 years ago now), I worked as a stockboy in an electronics store. We used "SKU" the way it was intended, just as stockboys probably still do now. Every product has a "SKU number" used like a UPC code to track stock counts, and that eventually got shorthanded to refer to the product itself. (Note that I'm not contradicting you, just adding a little more info.)

        It's always annoyed me when I see this in regular life, just like I see games now referred to as "IP's". In most cases, it's a vain attempt at looking "hip", as if you're cool enough to throw around industry-speak. Usually, though, the true origins of such terms come from marketdroids, lawyers, or worse.

        There's no reason even for an analyst to use the term "SKU". They're not tracking stock. It actually would make somewhat more sense to use UPC as a generic term meaning "product model". I think terms like this are always annoying, though, and would much prefer it if everybody could just settle on plain English outside of their work environment. Why do all of our casual conversations have to include so much meaningless industry jargon?

        "Model" is a perfectly fine word to use. #7 definition at dictionary.com: "a style or design of a particular product". There's no reason to repurpose industry acronyms when we have perfectly meaningful English words already. Unless you REALLY don't have time to utter that extra syllable.
        • I think in this context it could be warranted because they are saying that the new Elite package will sit on the shelves alongside the Core and Premium with an entirely new UPC/SKU rather than replacing the Premium or Core.
    • It's still not as bad as calling every musician an "artist" in the post-Napster world.
    • Like one or two of the readers of this site, I'm not an X-box fanboy, and I had NFI what this article was about from the headline or first line of the summary:

      Elite Won't Replace Premium or Core Skus

      and

      As the day has progressed, more information about the 'Elite' has become available.

      Assumptions:

      - everyone knows what a "sku" is (an open-source implementation of a ski? a pygmy skunk?)

      - everyone knows that the word "Elite" refers only to a particular version of a particular game console released by Microsoft

      -

    • by SeaFox (739806)

      Is everyone suddenly a merchandiser or something? I'll replace your sku.


      I was thinking the same thing the other week, I read an advertisement (something meant for the general public) and it actually referred to the "Star Wars [i]franchise[/i]" and it was something LucasFilm was involved in, it wasn't a competitor using the phrase. Since when is a word like that used in advertising? It practically screams "this is a studio cash cow" to me.
  • by Anonymous Coward
    470 dollars for the 360 itself
    100 dollars for WiFi
    200 dollars for the HD-DVD addon
    50 dollars a year to play games online - 250 dollars over five years

    There are no hardware changes other than the addition of the HDMI digital connection - so all of the existing hardware defects will exist with this model. The move to 65nm has been delayed to later this year. So you sure as hell better pay for an extended warranty.

    And that is not including all the little things like chargers that Microsoft is nickel and diming
    • by phorm (591458) on Wednesday March 28, 2007 @04:00PM (#18519613) Journal
      WTF are they smoking up in Redmond?

      At first it seemed to be dope due to the green color. At closer inspect, though, it turns out that it's dollar bills...
    • I don't know what they're smoking, but I want to stay away from whatever it is.

      The price comparisons of the 360 and PS3 just got a lot more complicated, and not in Microsoft's favor. The new SKU is arguably less functional than the closely priced $500 PS3.

      I'm sure the idea looked good on paper, but ultimately I can only see this as hurting Microsoft's position.
      • by GrayCalx (597428)
        I'm not sure I see how this could hurt their position. They still have two other versions that are significantly (meh) lower than the PS3. This is just an option for those who... I don't know, like the color black (actually I think it would be for those who for some reason or another need the HDMI output) but still the upgrades are kind of silly.

        I definitely agree that this elite is not really worth the price, but they still have the other models available, so I don't see how this could hurt them, per-
        • by CaseM (746707)
          This hurts them mostly because the perception of a price difference has changed. Most people who buy a game console aren't people like us who read spec sheets, weigh technical differences of various minutia and then argue about them ad nauseum - they just go to the local big box store and look at the sticker price. This new SKU tarnishes one of if not the biggest of Microsoft's strengths this generation: price.
  • PS3 Advantage (Score:5, Insightful)

    by tb3 (313150) on Wednesday March 28, 2007 @03:51PM (#18519493) Homepage
    But the PS3 advantage (if they can establish a price point and sell enough of the damn things) is that the Blu-Ray drive is standard. That means that the larger capacity can be used for game data. No matter what optional drives Microsoft ships for the 360, game designers will always be hobbled by the constraint of the DVD as the lowest common denominator.
    If the PS3 survives its games will end up looking a lot more impressive than 360 games of the same vintage.
    • by whodunnit (238223)
      The medium the game comes on will not effect the quality of the game. True, they might have to make the game span more than one disk to fit the same amount of content. But that does not in any way mean the game will be of lower visual quality than the PS3 version.

      Multipule disk games happened all the time on the PSOne and other older systems, and since dvds are so cheap to produce it's not going to overly effect the bottom line.
      • The medium the game comes on will not effect the quality of the game. True, they might have to make the game span more than one disk to fit the same amount of content.
        Swapping discs whenever you cross back and forth over a zone boundary is not fun and reduces the interaction quality of the game even if not the visual quality. What do you suggest to prevent this?
        • You could use the hard drive to cache the content better. Or reduce the game content to less than 9G. Are there actually any multi dvd console games at this point? I understand higher res textures for PS3 / Xbox 360 will impact the size needed but has it even happened where more than one dvd was needed?
        • by crabbz (986605)
          Easy! The Elite should have included a DVD changer so you can stick all the discs in and let it switch around as needed. That would show those blu-ray goons.
      • Re: (Score:3, Interesting)

        by BeansBaxter (918704)
        I find it very interesting that in this generation people are concerned about needing more than a dual layer dvd to store game content. I don't work in the industry but I have to think that filling 9Gigs of data is a pretty impressive and expensive feet. I imagine development costs will be much higher for a game that requires that amount of space. Packaging it on one really expensive new Blu Ray disk or multiple easy to press DVD's is probably the least of the worries.
        • Re: (Score:2, Insightful)

          by Anonymous Coward
          "Packaging it on one really expensive new Blu Ray disk or multiple easy to press DVD's is probably the least of the worries."

          BluRay disk prices for developers are a few cents more vs DVDs. BluRay disks are much cheaper than multiple DVDs. Publishers and developers HATE multi-disc titles. Needlessly eats into profits - take a million selling game multiply the cost of a second DVD(or even worse third) and you are throwing away a huge chunk of profits.

          GameCube games last gen for the most part had developers ju
        • by feepness (543479) on Wednesday March 28, 2007 @05:05PM (#18520465) Homepage
          I don't work in the industry but I have to think that filling 9Gigs of data is a pretty impressive and expensive feet.

          Also, 640K ought to be enough for everybody.
        • The game Vanguard: Saga of Heroes, a SOE MMORPG, packs in at a whopping 17gb installed. 2 DVD's plus the inevitable patches and updates that need to be downloaded.

          While you can rant and rave about the merits of Vanguard it shows that a single dvd just isn't enough anymore.

          And that game, unlike Everquest 2 doesn't even have tons of speech in it.

          Neither does it have any pre-rendered movies. That 17gig of data is just maps, textures, music and sounds.

          I remember that one of the first CD games, 7th guest gam

    • Re:PS3 Advantage (Score:5, Informative)

      by kinglink (195330) on Wednesday March 28, 2007 @04:11PM (#18519749)
      I work in a company that does open world games (and good ones actually). I have to tell you the "hobbling" isn't true. The 512 megs of ram that we have on the system is a bigger issue than anything that has to do with the media we are working on.

      Blu-ray sounds great but what do you need to fill it with. As it is the amount of money we pay to get the game shipped now is a lot. Cost is what's stopping us from making bigger or more diverse games, rather then size of the media again.

      The people who are hurt the most by this are the JRPG companies who just explode with FMVs, blue dragon is a 3 dvd game, other then them I've heard no complaints about the size of the media. Hell, The only reasons they are filling up Blu-rays are they are using "stupid" tricks like uncompressed audio for Metal gear solid. I just have a simple question. Now that both systems are out, and we already have seen that the 360's dvd has a higher read speed then the ps3's blu-ray device (overall blu-ray SHOULD be faster, but in these two actual system the 360's drive is faster). Why are you using larger files sizes rather then using the "extra" power of the ps3 to uncompress these files? The simple answer is no, the ps3 isn't that powerful (Insomniac today claims you have 8 cores? funny we only have access to 6 cores).

      In the end blu-ray isn't going to be the answer. Sony's system has some good marks, but blu-ray isn't necessary, and the Cell processor is doing more to hurt the developer than it is helping it.

      If anything the 360 developer's biggest problem has nothing to do with DVDs, it's due to the fact that the Hard drive is non standard and we can't guarantee using that for caching, but that's a relatively minor complaint in the long run.
      • Drive speed complaints are over played. The standardized HD completely negates any rational arguement about drivespeed. Even a direct comparrison of drive speeds shows a fairly slight difference. Also, disc space is a marginal advantage for the ps3. Built in blu-ray play back is a better advantage.

        The ps3 is a expensive machine. For my money it was worth it. At some price point I'm sure it would be worthwhile for most gamers. I only hope it survives to hit that price point.
        • by kinglink (195330)
          If we are going to consider the HD an alternative to the drive, then you're installing games and drive speed is still part of an issue (not as big though). Play Tony Hawk Pro Skater 8 on the 360, it's a great game, however every time you take the disc out and put it back in you have a decently long 2-3 minute load time that's unskipable the first time you play it after that point, that's fine the first time but annoying every time you want to take a quick trip, the way they do it is a movie. I believe thi
          • Oblivion has been recently released and I have not heard of 5-10 min initial load times. I have heard of Dungeon load times are 50%-75% less thent he 360 due to HD caching. As for drive speeds the Xbox lists their peak speed (outside track) while the PS3 lists their average speed (inside/outside average). The average for both is not that far apart (x6.5 (DVD/Blu-ray) vs x~8.0(DVD)). Also there are many complaints of the noise level of the Xbox DVD. The HD negates any real effect on the game itself because t
      • by Anonymous Coward
        (1) They both have 512MB, but the OS on the PS3 permanently takes a much bigger slice of that, something like 128MB?? vs 32MB used permanently by the OS on the 360.
        (2) The 360 has symmetric multiprocessors--3 dual-core PPC chips that use the same memory heirarchy, caches etc. That's 6 in-order execution pipes. Compare that to the PS3 which has *one* general processor pipe and *7* (not 8) SPUs which are basically DSPs. One of those SPUs is permanently reserved to the OS so you only get to use 6 of them. The
        • Re: (Score:3, Interesting)

          by DrXym (126579)
          (2) The 360 has symmetric multiprocessors--3 dual-core PPC chips that use the same memory heirarchy, caches etc. That's 6 in-order execution pipes. Compare that to the PS3 which has *one* general processor pipe and *7* (not 8) SPUs which are

          Correction, the 360 has 3 multi-threaded cores (think hyperthreading), and the Cell has 1 multi-threaded core plus 7 SPUs. That means the optimal arrangement for the PS3 is to have one general execution thread and perhaps another thread responsible for farming out work

        • by mgblst (80109)
          The only people who can make a more bloated OS than Microsoft is Sony.

          After using some Sony software before, I can really believe it.
      • Re: (Score:3, Interesting)

        by DrXym (126579)
        The people who are hurt the most by this are the JRPG companies who just explode with FMVs, blue dragon is a 3 dvd game, other then them I've heard no complaints about the size of the media. Hell, The only reasons they are filling up Blu-rays are they are using "stupid" tricks like uncompressed audio for Metal gear solid.

        No, there are plenty of other reasons. Localization for example - being able to offer the same game in multiple locales from the same disk. Something which is very important in the EU, or

        • by kinglink (195330)
          "Simply put, companies don't have to use that extra capacity, but neither is there some barrier blocking their path when they get close to DVD-9's limits. Which many games already manage to get close to."

          That's fine however localization is NOT a major space concern. Not many games are close to breaking dvd-9s limits. At least not as many as Sony would like to tell you. Oblivion which is a freaking enormous game that is not even topping out. Those who believe they can't fit a game on a dvd isn't doing it
          • Re: (Score:3, Insightful)

            by DrXym (126579)
            That's fine however localization is NOT a major space concern. Not many games are close to breaking dvd-9s limits. At least not as many as Sony would like to tell you. Oblivion which is a freaking enormous game that is not even topping out. Those who believe they can't fit a game on a dvd isn't doing it efficiently or just are looking for excuses.

            And how much larger is Oblivion than its predecessor? How much larger is Oblivion if you tossed in Shivering Isles? Could Bethesda even produce a 360 "Gold Editi

      • I work in a company that does open world games (and good ones actually). I have to tell you the "hobbling" isn't true.

        Insomniac would like to disagree with you [gametrailers.com].

        If you ever hear someone say "Blu-Ray isn't needed for this generation," rest assured they don't make games for a living. At Insomniac, we were filling up DVDs on the PS2, as were most of the developers in the industry. We compressed the level data, we compressed the mpeg movies, we compressed the audio, and it was still a struggle to get it to fit in 6 gigs. Now we've got 16 times as much system RAM, so the level data is 16 times bigger. And the average disc space of games only gets bigger over a console's lifespan. As games get bigger, more advanced and more complex, they necessarily take up more space. If developers were filling up DVDs last generation, there are clearly going to be some sacrifices made to fit current generation games in the same amount of space.

        Granted, some really great Xbox 360 games have squeezed onto a DVD9. Gears of War is a beautiful game and shows off the highest resolution textures of anything yet released, partly because of the Unreal Engine's ability to stream textures. This means that you can have much higher resolution textures than you could normally fit in your 512 MB of RAM. It also means that you're going to chew up more disc space for each level. With streamed textures, streamed geometry and streamed audio, even with compression, you can quickly approach 1 GB of data per level. That inherently limits you to a maximum of about 7 levels, and that's without multiplayer levels or mpeg cutscenes.

        Sometimes people ask us, "If Resistance takes 14 gigabytes, why doesn't it look better than Gears?" Well, for one, Resistance didn't support texture streaming, so we had to make choices about where we spent our high-res textures. Resistance also had 30 single-player chapters, six multiplayer maps, uncompressed audio streaming, and high-definition mpegs. That all added up to a lot of space on the disc. Starting with Ratchet and Clank Future: Tools of Destruction we are supporting texture streaming, which will make the worlds look even better, and will also consume even more space on disc.

        There's no question that you can always cut more levels, compress the audio more, compress the textures more, down-res the mpeg movies, and eventually get any game to fit on a DVD. But you paid for a high-def experience, right? You want the highest resolution, best audio, most cinematic experience a developer can offer, right? That's why Blu-Ray is important for games, and why it will become more important each year of this hardware cycle.

        • It also means that you're going to chew up more disc space for each level. With streamed textures, streamed geometry and streamed audio, even with compression, you can quickly approach 1 GB of data per level. That inherently limits you to a maximum of about 7 levels, and that's without multiplayer levels or mpeg cutscenes.

          Ok, quick question. Why have ANY mpeg cutscenes? I understood the need back in the day when FinalFantasy VII had primitive graphics but GORGEOUS cutscenes, but now? RE4 (on Gamecube an

  • Disappointed (Score:3, Interesting)

    by MBraynard (653724) on Wednesday March 28, 2007 @03:52PM (#18519509) Journal
    Disappointed that this is a worse value than the PS3. I have a 360. I gave one to my brother and to my sister; I was thinking about handing mine off to my mom and getting the Elite, but it almost isn't worth it.

    I guess I'm just repeating the normal mantra: needs the HD-DVD built in and Wireless built in. Right now it's 480+200+100. I find the price of the little wireless device most eggregious even now and wonder why there are not third party devices out there that can do the wireless.

    • Re: (Score:3, Insightful)

      by clontzman (325677)
      Just to play Devil's advocate (this is /., after all), but seeing as you've given away one Xbox and may be on the verge of giving away a second one, you should probably be glad they're not bundling in HD-DVD, because then you'd have bought three HD-DVD drives instead of one or none. In your case, you can buy one HD-DVD drive and keep it if you decide to upgrade to the Elite or the Elite 2 on down the road. Same deal with the WiFi adapter... even though I think they should probably include it, it's a benefit
      • by bilbravo (763359)
        I'll do the same to you... why buy an Xbox360 Elite if you already have an Xbox360? Chances are if HDMI and the larger hard drive means that much to you, you can sell that wireless adapter along with the old(er) xbox360 and get some/most of your money back from it. Not including the wireless on the Elite was for the same reason MS didn't include it on the others... people will pay $100 for it.
        • by clontzman (325677)
          Frankly, unless HDMI is a deal-maker for you, I'm not sure why you would. I was responding to the GP's post, though, and he was considering giving away a second 360 in order to buy an Elite. In his case, not having to re-buy HD-DVD drives and WiFi adapters is potentially a good thing. I like my Premium and have no real desire to buy an Elite (though the HDD space would eventually be nice).

          Of course, you're right about the WiFi being external primarily because people will pay for it. That said, it's only mar [newegg.com]
      • by MBraynard (653724)
        I gave away two 360s. They both have HDTVs but not 1080ps. I figure they can get the wireless (or stay wired) and the HD-DVD if they want. Mom doesn't have an HDTV, but the 360 would be for DDR and casual games.
    • by goodenoughnickname (874664) on Wednesday March 28, 2007 @04:49PM (#18520281)

      I gave one to my brother and to my sister; I was thinking about handing mine off to my mom
      I hope I'm related to you somehow.
  • I agree with the comment that was quoted. Microsoft would have done a lot better making this Elite edition use either blu-ray or use the HD Drive. Allow it to play HDdvds or Blu-rays would have been reason to buying the elite edition. Even though they do have the HD drive you can install, but not everyone wants to go to the hastle to install extra stuff.
  • Why? (Score:5, Insightful)

    by MeanderingMind (884641) on Wednesday March 28, 2007 @03:55PM (#18519543) Homepage Journal
    Why did Microsoft do this?

    Releasing a console with built-in HD-DVD would be interesting. Though there are potential reasons to avoid this.

    1) Price being too close to the PS3, in some ways validating it.
    2) No guarantee of success and thus subsidizing of the HD-DVD drive.

    But that said, decided not to include an HD-DVD drive pratically makes the whole thing a wash. Without the HD-DVD drive, all we have is a more expensive premium console that has a larger hard drive, HDMI hookups, and is black.

    Without any truly tangible benefit, it shrinks the extremely important price difference between the consoles. My points 1 and 2 above apply in almost the exact same way.

    1) Price too close the the PS3, in some ways validating it.
    2) Lack of backing of HD-DVD can be seen as implying a lack of confidence in the medium.

    The whole thing seems ill-conceived. If they didn't want to release a console with an built-in HD-DVD drive, they could have simply upgraded live and announced a new, larger hard drive alone and perhaps a black case mod for the first 1000 buyers. A whole new SKU for this is a ridiculous waste of resources, while at the same time killing several key talking points for the 360.
    • Agreed entirely. Theres nothing wrong with the elite as a machine. HDMI and a larger drive is good. Not including an HD-DVD is fine too since nobody really cares about these formats. This just isn't the right way to position it and this wasn't the right time to launch it.

      Microsoft has the upper hand for the time being with its large game library and installed base, and after being out for close to a year and a half its probably gotten cheaper to make. If they were smart they would have dropped the p
    • by LoudMusic (199347)

      2) Lack of backing of HD-DVD can be seen as implying a lack of confidence in the medium.

      I think this is the single most important element of the post. If Microsoft aren't giving a thumbs up to HD-DVD that means they think Blu-Ray is going to be the big format. They're saying, whether intentionally or not, that Sony's technology is going to be the 'standard', and Sony's PS3 is the cheapest way to get a Blu-Ray player. By not including an HD-DVD reader Microsoft might have seriously screwed up an otherwise shiny console generation for themselves.

    • Re:Why? (Score:5, Insightful)

      by Itchyeyes (908311) on Wednesday March 28, 2007 @05:13PM (#18520563) Homepage
      Actually the why is pretty simple.

      From an article I originally posted here:http://vgecon.blogspot.com/2007/03/purpose-of -xbox-360-elite.html [blogspot.com].

      The answer is that the Xbox 360 Elite is aimed at people who are willing to pay $479 for an Xbox 360. That may seem a little too simplistic, so I'll explain. One basic rule of economics is that a product's price is partially determined by how much the consumer values it. However, every individual has their own concept of what the product is worth. Ideally a manufacturer would want to sell to every customer at exactly what they're willing to pay, as long as it's higher than the cost of producing the product. Unfortunately this is just not practical in the real world, especially with a large volume product. Just because someone is willing to pay a certain amount doesn't mean that they won't pay less if they can. People would find out that you're selling the product to others for less and demand that price even if they would have been willing to pay more.

      There are two alternatives to this. First, you could set a single price; but this is a gamble. If you price too high you will lose sales to people who valued the product less. If you price too low, you lose profit margins from people who would have been willing to pay more. The other alternative is to still set your product at multiple price points but vary each version slightly. An excellent example of a company that uses this tactic is Starbucks. A regular coffee at Starbucks is only around $1.60; but a double foam mocha latte... whatever can cost you upwards of $4.00. In truth, both products cost Starbucks approximately the same amount of money to make. Price sensitive customers will choose the regular coffee, and people who are willing to pay more may spring for the more extravagant drink.

      This is what Microsoft is doing with the Xbox 360. Sure, the Premium costs Microsoft more to make than the Core, and the Elite costs them more then the Premium; but it's less than most people think. Microsoft may still be losing money on the Core, but they're probably breaking even on the Premium at this point. At $479, the Elite might even turn a small profit.

      Some people have pointed out that the new price tag erases Microsoft's price advantage over the $500 PS3. From a marketing perspective, it may seem that way. From an economics perspective though, things are still very different. The key point is that Microsoft is going to be ready for a price cut far sooner than Sony will be. Before the Elite, a price cut would have meant that they would have to sacrifice any profits from people who were still willing to pay top dollar for a system. A new high end model allows them to maintain their position in the $400 range, while extending their market by dropping the low end of their price range.

      I am no marketing expert, so I can't really say what the effects will be there. Economically though, this is a smart move by Microsoft.
    • 1) Price being too close to the PS3, in some ways validating it.

      I thought that the price of the XB360 + HD-DVD add-on was the same price as the premium PS3, so I just don't see this. As long as they don't kill the other verions, I don't see it as a validation. I also don't see offering a DVD-only console as lack of confidence because not many gamers care about that right now. Maybe two or three years from now, things will be different. I think one can be confident in something and still not force people
    • by GWBasic (900357)

      But that said, decided not to include an HD-DVD drive pratically makes the whole thing a wash. Without the HD-DVD drive, all we have is a more expensive premium console that has a larger hard drive, HDMI hookups, and is black.

      Which makes the new XBox a perfect device for HD movie downloads! Bill Gates claims that HD movie downloads will beat both BluRay and HD-DVD.

  • Blu-Ray (Score:5, Insightful)

    by *weasel (174362) on Wednesday March 28, 2007 @03:55PM (#18519547)

    It appears to me that Microsoft sees the writing on the wall - Blu-ray is going to win the format wars

    It appears to me that Microsoft is acknowledging the format wars are stillborn. Their support for HD-DVD was just about defusing the PS3 anyway, not defeating Blu-Ray. MS already has their license fees secured, regardless of how the little-plastic disc formats fare.

    The media victory Microsoft is after, is digital delivery.
  • Prices (Score:5, Insightful)

    by Applekid (993327) on Wednesday March 28, 2007 @04:04PM (#18519643)
    Prices are funny. Microsoft is obviously milking every dime they can get out of gamers who buy a system before they drop the prices. While there is no sign of that happening, you can pretty much count on any PS3 price drop to be matched by a 360 price drop of equal or greater value.

    That "validation" of the PS3 strategy by way of price is a bit misleading, though. Sony equates the PS3 to fine equipment whose price indicates its value. But it's a genuinely expensive device to make. What the PS3 price points have proven to the people who figure out the prices of consoles is that consoles have been too cheap and the market could sustain them at higher prices than previously thought.

    Other very expensive consoles have gone down in flames for home use... but the median price for the majority of consoles at the market at any given time has been a $200 - $250 sweet spot. The only thing that Microsoft and Sony have done is show that the sweet spot can be coaxed higher.

    What I don't understand is why Microsoft isn't playing a price war yet. They've got the biggest userbase for this generation, most established games (excluding Wii's ability to play Gamecube games), and they're turning a profit on current consoles sold. Sony's machine costs $800 and putting pressure on them to lower a price point could hasten any future demise... if it's in the cards.

    My only stab at trying to understand is that Microsoft eventually wants to buy the Sony gaming division, but I'll be the first to suggest that's an outrageous claim. Hmmm...
    • by GeckoX (259575)

      What I don't understand is why Microsoft isn't playing a price war yet. They've got the biggest userbase for this generation, most established games (excluding Wii's ability to play Gamecube games), and they're turning a profit on current consoles sold. Sony's machine costs $800 and putting pressure on them to lower a price point could hasten any future demise... if it's in the cards.

      And conveniently not mentioning the PS3's ability to play PS2 and PS1 games.

      At the immediate moment, the 360 does have more n

      • by Applekid (993327)
        I'll concede I forgot to mention PS2 and PS1 games. I also forgot the 360 plays some XBox games. :P

        The PS2 definitely had more show stopping quality games than Gamecube and is a great asset to the PS3's playable library... PROVIDED that the recently crippled backwards compatibility gets continually less crippled with time. On that same token, I certainly want to see much better backwards compatibility on the 360 at a much faster pace.

        AFAIK, Wii's Gamecube backwards compatibility does not exist in a software
    • by Itchyeyes (908311)
      I don't think Microsoft's margins are as good as you think they are. If they're turning a profit on any consoles at this point, it's probably only the Premium and it's probably still rather slim. For the time being there's not much reason for them to lower the prices as the $499 PS3 is virtually impossible to find and there is still a rather large price gulf between the Xbox 360 and the $599 PS3. My guess is that they will implement a price cut either A) after they sell through the black Elites, B)when t
    • by tkrotchko (124118) *
      "What I don't understand is why Microsoft isn't playing a price war yet."

      They're waiting for Sony to blink first.

      Sony drops $100, MS drops $120.
    • by DrXym (126579)
      Sony's machine costs $800 and putting pressure on them to lower a price point could hasten any future demise... if it's in the cards.

      I seriously doubt it costs Sony $800 to make them. The iSupply estimate that stuck that price tag on the PS3 was done even before it was released, during a blue laser diode drought. So iSupply stuck a $125 price tag on the Blu-Ray drive alone and high prices on other components too. Six months later and blue lasert diodes are not in short supply, and neither are PS3s. Clearl

  • I have both a 20GB 360 and a 60GB PS3. When I compare price vs. features between both units, it's now starting to look like the PS3 wins out. Especially if one believes that Blu-Ray is going to win the HD format war. MS has made a pricing mistake, and I think the market will give them a good thrashing as a result.
    • by Babbster (107076)
      There's one significant problem with all the comments that Microsoft is making a mistake with their pricing compared to the PS3: They can drop the prices anytime if they believe it's necessary. If they're currently losing money per console (I haven't seen recent estimates), they're losing far less than Sony is right now, which means they have pricing flexibility. They could drop the whole lineup from $480/400/300 to $400/300/200 and probably still be losing less per console than Sony.

      To my way of thinki
      • by maynard (3337)
        Yeah. I mean, which unit to buy (if any) is entirely up to you and your personal finances. Right now the 360 has a dramatic gaming advantage over the PS3, but that should change within a year or so. I bought the PS3 to play Blu-Ray movies. The only game I have for it is Resistance, and compared to Gears of War... well, let's just say I'm more impressed by Gears than by Resistance.

        As for your point on pricing flexibility, that's spot on. Microsoft has cut out an HD optical drive yet prices the unit $20 below
      • by Retric (704075)
        Sony might be losing more money per PS3 but they also have more to gain from it. IMO they are more than willing to kill off the PS3 if it wins them the next format war.

        Anyway, PS2 sold 100+million units, lasted for 6 years and is still selling faster than the 360 and ps3 put together. If you assume the 360 will last as long as the Xbox and the PS3 will last as long as the PS2 then your price per year is the same but Sony's loss per unit can be much higher and sill break even.

        PS: It's still a little early
        • by Babbster (107076)

          PS: It's still a little early to tell but IMO the PS3 is in a much better position. It has better graphics capabilities than the 360, its disk's hold more data and it's still selling reasonably well. Because the PS3 has better base hardware the 360 is going to need to start the next cycle even sooner or play second fiddle for 4+ years.

          All but the disc space argument could have been made for the Xbox over the PS2. It's entirely about the games and PS3 is far, far behind in that area with every chance that

  • Upgrading to the Elite is problematic for me, even if I were so inclined, because my wife likes to play the XBLA games on her own account and I don't want to rebuy them all. Has Microsoft anticipated this and will they make games fully authorized after I upgrade? I don't want to be forced to connect to XBL and under my account just to play my XBL games. If they want me to consider upgrading then they should plan to offer assistance to people in my situation. I'll warrant there are plenty of people like
    • by powerlord (28156)
      Yeah ... there are people who already do what you want. ... they're using Sony's PSN, it supports this sort of functionality.
    • Yes MS is providing an migration route, not only for HD content, but Machine ID specific content.
  • by Chazmyrr (145612) on Wednesday March 28, 2007 @04:22PM (#18519885)
    someone at Microsoft is smoking crack. They get the edge over Sony and then they step on their crank with this crap.

    The pricing virtually eliminates premium sales. No one is going to pay $400 for the premium w/ 20GB instead of $480 for the elite w/ 120GB when the 120GB drive is sold separately for $200. Now there's actually a choice for the consumer at the $500 price point. Do I buy the 360 with the larger hard drive or buy the 20GB PS3 and have a Blu-Ray player?

    Leave it to Microsoft to make the $600 PS3 look like a good deal. $480 + $100 WiFi + $200 HD-DVD = $780.
  • by FrozenFOXX (1048276) on Wednesday March 28, 2007 @05:00PM (#18520423)
    I think that most people are missing the point. For the general population who's interested in obtaining a game system who cares? The comparing value versus price between PS3 and 360 is only valid if you're looking at doing everything BUT gaming.

    I mean really, you can tell me for instance that the PS3 will do everything from clean my laundry to wash my car but at the end of the day it doesn't have my Gears of War. It doesn't have my Crackdown. There's no Forza Motorsport. There's no XBLA. To top it off it's also a lot cheaper for me to get to play a large library (and ever-growing...just check out upcoming releases like The Darkness, Bioshock, and others) of great games that look spectacular with a superb online system. Can I play Blu-Ray movies? No, but then, did I really want to buy a game system to play movies?

    It's part of the same reason the Wii is selling. It's cheap, it plays good games, and nobody gives a fuck if it can't wipe your butt for you, too. So what does this new 360 do? Who does it cater to? People that feel they have to have the "extra shiny" version of a console to feel superior to other people. The other people are those interested in the Marketplace for downloading things which means there isn't a value comparison with the PS3 since the PS3 doesn't have access to the Marketplace...the very source of content the interested users wanted in the first place. The rest of us just get the Premium and rock on because it lets us play our games which is what WE wanted in the first place.

    There will be a true features/price comparison between the 360 and PS3 when the PS3 has a large library of awesome games (and for the cross-platform ones like DMC4, VF5, and others it's going to need to be worth coughing up several hundred dollars for a better experience or we're still going to get them on the cheaper system that gives the same or better experience) that make it worthwhile to have for playing games.

    Anyone seriously interested in a media server has probably already gotten an Apple product or some other personal computer solution since they tend to be better at it overall. This is all for show and to cater to an elitist (though not necessarily "elite") portion of the interested 360 population, not to the rest of us who buy game systems for playing games.
    • I mean really, you can tell me for instance that the PS3 will do everything from clean my laundry to wash my car but at the end of the day it doesn't have my Gears of War. It doesn't have my Crackdown. There's no Forza Motorsport. There's no XBLA. To top it off it's also a lot cheaper for me to get to play a large library (and ever-growing...just check out upcoming releases like The Darkness, Bioshock, and others) of great games that look spectacular with a superb online system. Can I play Blu-Ray movies? No, but then, did I really want to buy a game system to play movies?

      I mean really, you can tell me for instance that the XBox 360 is the end-all be-all of consoles but at the end of the day it doesn't have my Resistance. It doesn't have my Motorstorm. There's no flOw. There's no PS3 store. To top it off there's also a huge library of amazing and amazingly cheap PS2 games that I can play. Can I play Blu-Ray moves? Yes, and they look amazing and are a great added bonus.

      Listen, I like my 360 (Worms + Viva Pinata = awesome), but your arguments make no sense.

  • by Xest (935314) * on Wednesday March 28, 2007 @05:17PM (#18520637)
    MS wants to get the new iteration of their 360 hardware out the door that is, the cooler, quieter and cheaper to produce iteration.

    Whilst cheaper to produce however, MS will still initially make a loss until they're shipping en-masse. Therefore, I'd say MS is releasing the elite with the new hardware iteration as a method to ship said new hardware without taking as high a monetary loss. Essentially, what this means is that they're using the elite as a tool to bring down cost of production of the new hardware iteration, so that 6months down the line, they can start building the premium version with the new hardware so cheap that they can announce a massive price drop on the core and premium.

    Whilst the Elite may indeed look like an idiotic short term decision, if this is their plan then by the end of the year you could see MS shifting the 360 perhaps even as cheap as the Wii is currently. This is something Sony wont be able to compete with any time soon, they've already shafted backwards compatibility in the name of reducing production costs for the European release of the PS3, by xmas 2007 year I'd be suprised if the PS3 had dropped at all, but again, I bet the 360 is selling for current Wii prices. As an aside, I'd guess the Wii will be cheaper again by then, Nintendo is shifting so many units and never made a loss per-unit in the first place so a price cut would be an easy hit for them by xmas 2007.

    I don't know US prices off by heart, but my prediction for xmas 2007 console prices in the UK is something like:
    Wii - £149.99
    360 Core - £169.99 (or possibly even written off altogether)
    360 Premium - £199.99
    PS3 60gb - £399.99
  • like this one that presumes everyone already knows what its about just because its apparently a microsoft product?
    Its just like presuming that all computer software runs under MS windows.
    I have no clue what an elite is even after reading the post.
    • This one was pretty pathetic. The first mention of the actual product's name that the story is about is in the 12th of 13 lines in the blurb. I read all the way to the end before I knew what the title or article was even about, and I still don't know what it all means. Of course, Zonk apparently knows plenty about this, as he put up two articles on the subject today. Maybe an update to the previous article or a new article that didn't show up on the front page was in order instead of a brand-new, totall
  • They just cant include it because no drive does 12 speed DVD and therefore doesnt meet the spec for 360 games.

    MS can easily supply a BR drive too, but believe that HD DVD is better for the consumer, ultimatly it'll be digital online delivery anyhow and media will become a thing of the past.

    Saying that I dont see the Elite offering good value for money unless your desprate for HDMI & love HDCP.

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