360 Rumour - More believable then the 60gig BS

[Untamoi]

starcraft said:

Username2324 said:
I think you misunderstood was I was saying then, I was trying to point out that making a 20GB and a 60GB laptop drive is different, and therefore more costly, just like making a 120GB lapotop drive requires different technology and in turn costs more.

My point was it would cost Microsoft much more money to switch from buying 20GB to 120GB, and would either eliminate the price drop, or drive Microsoft into the red once again.

But thats just it. With economies of scale the price difference between a 20gb and 60gb HDD is almost negligible. There is still a reasonable difference with models like 250gb and to a lessor extent 160gb that haven't been as widely produced, but even 120gb are only marginally more expensive at manufacturing levels. The main retail difference comes from markups.

So what you are saying doesn't make sense. The actual physical cost of the drives is almost the same, the only cost that would exist is changing over production lines. But Microsoft wouldn't pay this cost themselves, because they would simply make their third-party producer absorb it by threatening to switch suppliers. If the TP refused, they really would switch suppliers.

At the end of the day, whichever scenario you really were talking about, the price of making that model of Xbox 360 is almost exactly the same before AND after the HDD upgrade.

 

MS sells too little hardware to have enough power to threaten HDD suppliers. There are dozens bigger customers for HDD suppliers,  especially several PC manufacturers. Even if MS would switch supplier it would have limited effect for most suppliers. I doubt any big HDD supplier would be ready to take losses instead of MS. Also there aren't that many HDD manufacturers as you may think. There are less than 10 big HDD manufacturers anymore and all others are too small to produce enough HDD's for MS.

 Anyway, most people interested about consoles don't really care about HDD size.