Ori, IMO, I tend to think that the HD-DVD Xbox 360 will just become the new elite.

IMO, when the elite came out, it seemed great - HDMI, huge HDD, all the bells and whistles.

Fast-forward 6 months: the premium now has the HDMI, leaving the Elite to cost $100 more for just a black finish and the larger HDD: it's not a great value.

Because of this, I think MS will just cut the current-spec elite (everyone said from the beginning that the elite was going to be LE). And add the HD-DVD to the Elite, with a 150gb HDD or even 200gb HDD. Remember, those HDDs don't cost alot more to make. I doubt the current Elites cost MS more than $350 to make. Adding a $50 HD-DVD drive would be easy, allowing MS to cut prices on the Prems and Cores next year, keep the elite at that price (or even drop it to $400 to compete with the PS3), and add the HD-DVD.

Think about this in early 08:

$249.99- Arcade Bundle
$309.99 - Pro/Premium Bundle
$399.99 - 150gb Elite HD-DVD

In that sort of configuration, MS has the corner on alot: it'd force Nintendo to drop it's prices or see it's value-priced Wii at a disadvantage, it'd allow the Prem another decent drop, and would kill the 40gb PS3. Merely because that PS3 would lose any and every advantage as a blu-ray player. Wouldn't you rather have a HD-media capable system with 110gb more space for the same price?

That sounds reasonable. Elite does need a boost in feature-set in order to remain competitive.

""""would kill the 40gb PS3. Merely because that PS3 would lose any and every advantage as a blu-ray player. Wouldn't you rather have a HD-media capable system with 110gb more space for the same price? """

==> Personnaly, I more predict the bundle MGS4-40gb for 400$ to unmake the whole Xbox offer

but Overall, I agree about your price strategy for Microsoft, it seems possible.

IF it can also be allowed to Play games

M$ will see a BACKLASH like never before

n You all say SONY GOES BACK on their WORD

look at M$

darth, what the crap are you talking about?

"allowed to play games" what? Are you reffering to them putting out HD-DVD only games? They will not do that, and you know it. Microsoft has even gone as far as making dev's ensure their games play on the core just to be honest with that basis - why would they then kill their largest % of userbase (ie, everyone that didn't have a HD-DVD elite).

If anything, like others have said, a HD-DVD powered X360 *might* be allowed to have HD-DVD games for those that required multiple disks such as Lost Odyssey or Blue Dragon. I see that as a possibility, but none other than that.

It's to give people choices and to appeal to different segments of the population.  There may be people interested in getting both a HD-DVD player and a 360 so this is another option that they have.