| Mummelmann said: You pose some interesting questions starcraft. There isn't much to do except lower the price by, say, 50 dollars or so on the top models and perhaps release some sexy bundles! They could also start selling Elite's or Pro's with a prepaid XBL Gold subscription for a given time, a year or two, just to sweeten the deal and make a slight carrot out of their awesome online. I'm really glad this is happening now, my TV will be in place in exactly one week and it seems I'll be able to buy both a PS3 and a 360 Elite for 2500NOK now...  Good times! |
If MS were to say, include 12 months of XBL Gold and throw in a WiFi dongle at $299, the Elite would be more comparable with the $299 PS3. I'm not even going to throw in the BD playback added value since the assumption is people are buying these to play games.
I'm not sure I'd see either happening as MS' margins are padded by both XBL subscription fees and their peripherals, the two biggest profit makers being their proprietary HDDs and the WiFi dongle.
So comparing a $250 Elite with a $299 PS3 still wouldn't look like the better value unless consumers are solely looking at price, in which case, they'd be buying a $199 Arcade.
Having a $250 Elite would also pose a problem due to MS' hardware and peripheral price structuring.
You can't charge $99 for a 120GB HDD if the difference in price between the Arcade and the Elite is only $50 (there is no longer any HDMI cable to justify a $50 price difference either). Charging $50 for an HDD, while great for the consumers, would negate the big profit margin MS previously had on those drives.
The only other option would be sell a 120GB Elite at $249, an Arcade at $199 (maybe even do another small price reduction although the margins on these SKUs have to be non-existent as is) and introduce larger HDDs (250 or 320GB) available only as separate SKUs at $99 (and no separate 120GB HDDs under $99). Charging any more than that would make it a very low volume seller at best. A $149 HDD would seem overpriced when looking at a $199 console (or less if MS chooses to cut their margins further) and would probably sell accordingly. MS could probably get away with selling 500GB HDDs at that price.
