I wonder if all the hacking of the Xbox could have contributed. With the way hard drive prices were falling, this seems very counter-intuitive.

http://www.edge-online.com/news/moore-the-hard-drive-killed-xbox

“… Not having a hard drive in every Xbox 360 was a hard decision, but we wanted to get price under control," the former Xbox and Sega US head commented. “The hard drive in every Xbox killed us; we were still selling it at $199 and the hard drive was like $70. That's why we prematurely left the original Xbox, because the more we were selling – there was still great demand – it was killing us, and there was no way to bring the price down.

“So in the end we determined at around the 25 million unit mark that we just needed to slow this thing down and just not sell any more, and move to the 360 as quickly as we possibly could. And to this day people still believe we left the Xbox too early but it was purely for financial purposes.”

Very interesting insight, and killing 2 birds with 1 stone.

Who would've thought. The hard drive came before its time. Wasn't the xbox hdd like 5 gigs or something. Thats dirt cheap now.

The XB HD was... 8GB? am I right?

And another thing, I thought the Xbox was discontinued early because of Nvidia that didn't want to make the GPU for it anymore?

Interesting I hope the new xbox 720 all SKU's come with a HD, that way developers can use them like they do on the PS3

the hdd was 8 gb. mine was anyway

xbox had 8-10 gig hard drive i believe

Actually, it was 10GB if I remember right.

Unfortunately, regular 'ol hard drives are very cost prohibitive - I don't know if $70 a pop is true, as moore says. But they are very expensive for what you get. It'd be much better if they went with some sort of external flash drive rather than the memory cards - that way you can get a ton more memory for very little cash.

Hopefully at some point, Microsoft upgrades the Arcades' storage solution to a more robust model. They did it with the 20>60GB switch, now lets see 320GB in the elite, and 2-4GB in the Arcade!

Ironically HDD should have been more affordable for 360, and I do think hacking, etc might well have had something to do with not having one as well.

I think MS also likes the idea of add on sales rather than having to include the cost in the console itself.

I guess MS also thought that the 360 approach would give them more reach - i.e. you add on to the core unit until it supports your needs, so if you're into digital downloads stick a larger HDD on top.

What really puzzles me with 360 is the console specific HDD - surely a strange move vs PS3 with standard HDD drive? Or maybe that was to ensure easy to control prices - i.e. charge more?

Moore's certainly opened up, although I don't agree with everything he says by a long shot but its certainly a nice confirmation of what's been going on behind the scenes.

One rather strange upshot is he's actually made me feel a little anti-MS where before I was totally neutral. It's not logical, but I really don't want to hand MS over the keys to my living room to be blunt, particularly given how keen they are to get in there... I don't know why but I'd much rather Nintendo, Apple or even Sony have the major stake (jointly probably) in home entertainment than MS... must be some 'evil empire' conditioning I didn't even know I'd had.

I thought they prematurely left the XBox business because NVidia stopped making their GPU? Well I guess the hard drive excuse works also.