I dont see how is it that expensive? it comes with a data transfer kit, which makes transfering data easy. Its not easy to do this on a PS3, I know, I've done it 3 times already. The small addtional cost for, the hassle free experience of the data transfer, alone makes it worth it. Plus it literally takes 5 seconds to uninstall the old one and install the new one. Again hassle free.

Stop making a big deal out of nothing. Microsoft made it easy on the everyday consumer to swap out HDs, and for that convienence you will pay a little more for it. I for one see no problem with that

The principle that I don't accept consoles or other electronic devices should have more expensive proprietary devices.

Man, you should have seen me when I bought DS and discovered you couldn't use GBA accessories you already had with it!

I just hate this whole business model.

The time doesn't matter - with PS3 you just dump it to an external HDD then back again.  Besides, who actually sits watching while this stuff is going on?

To conclude, I want to see fairly consistent prices for something like and HDD not a specialized one that costs more.

But to show I'm fair in this, I'll point out that nothing made my blood boil more than the cost of 8MB or whatever they were memory cards for the PS2.  My foray into consoles almost ended right there!

You're starting to use convoluted logic here. The Xbox HDD doesn't actually do anything but store data. It's just a hard drive. Installing it in a plastic shell so it can plug into an Xbox does not increase its value.

The only reason for the shell design was to allow MS to package it as a proprietary peripheral and charge the most consumers were willing to pay for it.

And it absolutely is expensive relative to what HDD space goes for today.

$199 Xbox 360: emulates Xbox games.

$129 Xbox 250GB HDD: stores data.

The bolded is the main reason why it costs that much.  Wouldn't make much sense for them to have a SKU at $300 when you could make the equivalent for cheaper by buying an Arcade and a HDD.  So they are looking at a cost of $100 at least.

And there you have it: a logical reason for paying a premium for a proprietary HDD.

Personally, I'd rather pay a lot less for twice the storage space, even at the cost of a chunk of idle time required to back up and restore data, but the MS method is the least painless for its premium cost.

Maybe the only complaint should be why MS didn't just skip selling the same size drive available in bundles and just sell 500GB drives instead. Of course that would only reduce the perceived value of 250GB SKU bundles and a lot more consumers would likely do the "build your own" $199 Arcade + $129 500GB HDD.

But peripheral pricing has always been a part of the console business model.

Generally, until costs can be brought down on hardware and they aren't sold at a loss, the peripheral market is the sweetest plum for console manufacturers (take Nintendo and the $40 remote + $20 nunchuck + $20 motion plus per player = good business model).

MS basically painted themselves into a corner with their peripheral drives in that they HAVE to charge X amount for these drives or else it makes more sense for consumers to buy a base $199 Arcade (which is less profitable) and then add on a drive. If the cost to build your own bundle is ever less than the price of the MS bundles, they lose money.

Premium priced HDDs recover losses on the entry priced $199 SKUs. That's not really any secret. MS would like nothing more than to sell an HDD SKU to every Xbox consumer, but there are a lot of consumers who won't pay more than $199 for a video game console.

If they only charged a slight premium over the cost of a bare OEM drive (packaging, plus the $5-10 housing), MS would have to lower the prices on all their HDD bundle SKUs.

Who says you have to like or agree with it as the consumer though?  Business models change all the time, particularly if driven by consumer demand and response.

I think having a proprietary HDD is just a step too far.  Controllers, etc. I can stomach more readily (and of course you get alternatives to offer some competition) but paying pretty much double (in terms of per GB cost vs a standard HDD) for an 360 HDD is just a bit much for me.

Weak!  I spent that much on my 120GB Hard Drive.

My 120gb HD is plenty for me :). Plus, I don't have the extra cash on me at the moment.