[catisfit]

More here.

The last point is quite interesting.

[obonicus]

Does anyone have any real idea whether MS will be making a profit off the $199 pricetag? Excluding game sales, naturally, because I'm sure it would if we consider those.

[Rangers]

Originally Posted by obonicus

Does anyone have any real idea whether MS will be making a profit off the $199 pricetag? Excluding game sales, naturally, because I'm sure it would if we consider those.

No, but look at video cards. A GT260 can be found for $230 after rebate on newegg. As far as I understand it, video cards also contain a hefty profit margin (in fact I think I read somewhere GT200 may cost $110 to produce? Not sure if that was including everything or just the die). A GT260 has a 576 mm^2 die, and 896 MB GDDR3 RAM and a circuit board. A 360 has two ~160 mm^2 die and one 70mm^2 IIRC (total 390 mm^2 silicon), and (not knowing the latest updates on 65nm etc it may be less) and 512 MB GDDR3 RAM.

Even allowing that 360 has several expenses GT260 doesnt (plastic casing, controller, various trinkets and cables, power supply, optical drive, more complex motherboard) it seems likely to me that 199 is at least break even or so on the Arcade unit.

Edit: Or the Arcade may be a (likely slight) money loser, and the Pro and Elite would seem a good deal more profitable (since they only add a HDD that doesnt cost near the price differential) to even things out. Also keep in mind cost reductions in hardware are ongoing, (such as Jasper, which has not yet been released) and 360 will likely stay at these prices for a year. Therefore the 360 hardware profitability picture, wherever it may stand right this second, will only improve until fall of 2009 and the next cut.

I'm guessing MS is staying pretty conservative, and are staying break even or above on hardware for the most part nowdays, due to the sting of the 1 billion RROD charge, and interviews where they have stated the goal is to break even on hardware or slightly profitable over a life cycle. If that's the case, they have to be trying to make up those first two years of heavy hardware losses even now.

[DrJay24]

I would think the Arcade is a loss, banking on future peripheral sales to make it profitable overall. I'd expect the Pro and Elite to make money, the price increase is absurd - a HD which probably cost MS $0.3/GB, a $1 headset and/or $0.50 HDMI cable. Of course minus the 512MB memory card and games.

[Rangers]

Originally Posted by DrJay24

I would think the Arcade is a loss, banking on future peripheral sales to make it profitable overall. I'd expect the Pro and Elite to make money, the price increase is absurd - a HD which probably cost MS $0.3/GB, a $1 headset and/or $0.50 HDMI cable. Of course minus the 512MB memory card and games.

Fair enough.

Sometimes when you figure the enormous amount of ridiculously profitable accessories MS sells, $50 controllers, $99 wireless adapters, $50/year for Live ($250 over a five year lifespan), wireless headsets, memory cards, hard drives (though they probably dont sell a ton, since most came with a HDD) first party cables, play and charge kits, I cant figure out why 360 isnt $99 right now for all sku's

[Shifty Geezer]

I've removed the off-topic comparison talk which was quickly goign downhill from a low starting place. Choice of console based solely on pricetag is moronic, and discussion of a platforms comparative worth without regard for software and usage, which is entirely subjective, is equally moronic.

On topic, with $200 finally reached we'll see if MS really knew if they understood the market's buynig habits!

[eastmen]

Originally Posted by Rangers

Fair enough.

Sometimes when you figure the enormous amount of ridiculously profitable accessories MS sells, $50 controllers, $99 wireless adapters, $50/year for Live ($250 over a five year lifespan), wireless headsets, memory cards, hard drives (though they probably dont sell a ton, since most came with a HDD) first party cables, play and charge kits, I cant figure out why 360 isnt $99 right now for all sku's

To be fair Live needs to be maintained. I know many like to say that it has no servers for gaming , but it does have servers for messagings , game achivements , your purchases and other things . Also you can buy live for as low as $35 a year and most normaly find it for $40 at newegg.com. So while i'm sure its a money maker , we really don't know how much they keep of that $50.

[Arwin]

I just want to add that I think it's a shame that it's not possible to have at least a semi-intelligent discussion on the price of a console in the context of market forces. It's not like Microsoft would have done anything with its pricing if there hadn't been any competition. But it's clearly not possible, and that makes me sad.

[Rangers]

Originally Posted by obonicus

It does, but that adapter retails for $50 anyway, and HDMI cables are cheap. You can get them all separately and not save a penny, essentially. (And if you don't want it, you almost have enough left over for a full-priced game.)

I'm repeating myself on this subject but I dont see the Elite as all that out of line.

To make an Elite from an Arcade, you need to add:

+150 HDD
+15 headset
+hi-def cable ($3-$20)

So right there you're at 368-385. Is it really that big a deal? Are people making a ~400 purchase really going to worry about it? Especially those who desire black? Elite also comes with component and HDMI and ethernet cable and the optical dongle thing (which doesnt matter to me). Now, the thing always said on the internet is "well just go get your $3 monoprice HDMI cable". But is that really what people do?? I'd argue not, I'd argue 90% of people will be paying Best Buy $20+ dollars for that HDMI cable. Hell even a savvy user like me, if I was buying a PS3 tomorrow, would very likely be grabbing a cable from the store, rather than waiting days for it to arrive in the mail and playing at SD in the meantime. I mean who is going to open up a $400 purchase and be like "I'll wait a few days to use this as it's intended to save 17 bucks".?

Also, there will surely be bundles for the holidays, you will likely be getting two full games with Elite/Pro but not Arcade, like you did last holiday with Forza/Mavel UA bundle, further tilting the value add in Arcade to murky at best.

Also, Elite is supposed to be targeted at that consumer who wants the best and isnt price conscious. The whole quibbling over a few bucks doesn't make sense when you account for how the sku is targeted. Hence the name "Elite".

Anyways I agree, until holiday software bundles show up, Arcade is the best deal, but it's pretty slight. And just keep in mind MS is always repositioning the sku's, previous, the Pro was clearly the best deal. Now it's the Arcade. Next time something different, no big deal.

[eastmen]

Originally Posted by Arwin

I just want to add that I think it's a shame that it's not possible to have at least a semi-intelligent discussion on the price of a console in the context of market forces. It's not like Microsoft would have done anything with its pricing if there hadn't been any competition. But it's clearly not possible, and that makes me sad.

To be fair the most popular verison of the system has only recieved 1 price cut of $50 since it launched in 2005. We were getting close to the start of its fourth year on the market. I think even without competition it would require a price drop of almost any product as its basicly exhausted the user base willing to pay x amount of money. When taken on the whole the 360 average price went up since launch and they have been able to do a good job of maintaining system value with refreshes of the system while still driving generaly higher % of sales over the same time last year I believe. If rumors of a new xbox coming before 2011 they really need to start to change the price or they would be forced to drasticly cut later in its life cycle and risk to many price cuts in a short time. The 360 should move to $200 its an advantage of being first and lacking a hardrive and next gen optical unit. Through hardrive additions they are still able to maintain higher p rice points and the highest sku announced (god knows there may only be more skus ) and on sale is still at the original launch price point of the 360.

When compared to ms's last console they are doing much better than they were. Last gen they were forced very quickly to shave off $100 a little over 6 months after launch and lost money on each console sold through the end of the generation. No matter where the 360 goes from here 2nd place ,1st place , 3rd place this is really a sucess story for ms when compared to the xbox .

[obonicus]

Originally Posted by Rangers

I'm repeating myself on this subject but I dont see the Elite as all that out of line.

To make an Elite from an Arcade, you need to add:

+150 HDD
+15 headset
+hi-def cable ($3-$20)

So right there you're at 368-385. Is it really that big a deal? Are people making a ~400 purchase really going to worry about it? Especially those who desire black? Elite also comes with component and HDMI and ethernet cable and the optical dongle thing (which doesnt matter to me). Now, the thing always said on the internet is "well just go get your $3 monoprice HDMI cable". But is that really what people do?? I'd argue not, I'd argue 90% of people will be paying Best Buy $20+ dollars for that HDMI cable. Hell even a savvy user like me, if I was buying a PS3 tomorrow, would very likely be grabbing a cable from the store, rather than waiting days for it to arrive in the mail and playing at SD in the meantime. I mean who is going to open up a $400 purchase and be like "I'll wait a few days to use this as it's intended to save 17 bucks".?

Also, there will surely be bundles for the holidays, you will likely be getting two full games with Elite/Pro but not Arcade, like you did last holiday with Forza/Mavel UA bundle, further tilting the value add in Arcade to murky at best.

Well, okay. A lot of this hinges on how savvy the average customer is, and I can't argue on that because it'd just be baseless speculation anyway. But the thing is, the elite used to be a good deal. In fact, before HDMI became standard, it was probably the best deal if you didn't already own a 360. Even after HDMI became standard it was a pretty decent deal. It's just been made to look worse and worse comparatively: MS really hasn't done anything to make the package more attractive since it was released, relative to the other SKUs.

Also, Elite is supposed to be targeted at that consumer who wants the best and isnt price conscious. The whole quibbling over a few bucks doesn't make sense when you account for how the sku is targeted. Hence the name "Elite".

I think this is fairly silly. It's just a name. Why not create a new Premium SKU titled 'The Best', and draw a glass of champagne and a Ferrari on the box? I own an elite. I bought it because it was a good deal, not because it's an 'Elite'. Your argument might hold if we were talking about shopping for yachts. Just having a fancy name doesn't automatically make it a luxury item.

[DrJay24]

Originally Posted by eastmen

To be fair the most popular verison of the system has only recieved 1 price cut of $50 since it launched in 2005.

The pro is down $100 with triple the HD space and added HDMI thanks in large part to competition. The reason it's not $199 now is probably the RRoD disaster costing them over $1B. Of course this works both ways, the PS3 has dropped in price, added features, etc. I'll ignore the Wii, I don't understand the draw, sales or pricing.

No matter where the 360 goes from here 2nd place ,1st place , 3rd place this is really a sucess story for ms when compared to the xbox .

Why do I care, I'm not a share holder, are you?

[RobertR1]

Originally Posted by DrJay24

Why do I care, I'm not a share holder, are you?

You care because it'll mean that MS has good incentive to stay in the gaming business. Their shareholders are happy and they can justify a bigger commitment to their gaming division. As a gamer, that should make you happy.

[BadTB25]

I will probably update to an Elite this holiday, depending on the bundles available and if it's at the same or lower price. At this point, I really hate having to clear space to download demos and game videos, which I tend to keep even after the game releases.

I'm also hoping to have more room for Rock band 2 and Guitar Hero World Tour dlc. The one thing that I envy my PS3 over my X360, besides the drive noise, is the user upgradable hardrive.

The other advantages of the Elite are mostly comsmetic in my eyes. I use a VGA cable for gaming (got it for <$10), so HDMI isn't a plus for me and the black color, while more desirable, doesn't justify the cost at this time.

Also, hopefully the new mobo will be out by then.

[obonicus]

Originally Posted by BadTB25

I will probably update to an Elite this holiday, depending on the bundles available and if it's at the same or lower price. At this point, I really hate having to clear space to download demos and game videos, which I tend to keep even after the game releases.

I'm also hoping to have more room for Rock band 2 and Guitar Hero World Tour dlc. The one thing that I envy my PS3 over my X360, besides the drive noise, is the user upgradable hardrive.

The other advantages of the Elite are mostly comsmetic in my eyes. I use a VGA cable for gaming (got it for <$10), so HDMI isn't a plus for me and the black color, while more desirable, doesn't justify the cost at this time.

Also, hopefully the new mobo will be out by then.

One problem with the black color is that it's harder to find accessories. It's shallow, but I've been thinking of buying one of those keyboards, and I'm sorta bugged that I can only find the white one. Same for stuff like Play 'n' charge kits -- I own one, but I'm slightly bummed that the battery pack, though black, is actually a different shade of black from the controller itself.

[RancidLunchmeat]

Originally Posted by obonicus

Well, okay. A lot of this hinges on how savvy the average customer is, and I can't argue on that because it'd just be baseless speculation anyway. But the thing is, the elite used to be a good deal. In fact, before HDMI became standard, it was probably the best deal if you didn't already own a 360. Even after HDMI became standard it was a pretty decent deal. It's just been made to look worse and worse comparatively: MS really hasn't done anything to make the package more attractive since it was released, relative to the other SKUs.

Huh? The best deal to who? It was insanely expensive and only 'the best deal' if you were going to download movies and required a bigger HDD, or if you needed to use the HDMI input because that's all your TV had. For most people, the premium of the Elite made it far from the best deal. I bought an Elite because it was black, because I had an un-used HDMI input and because I planned on downloading movies and storing content on my 360.

Things that go beyond what most basic gamers do.

I think this is fairly silly. It's just a name. Why not create a new Premium SKU titled 'The Best', and draw a glass of champagne and a Ferrari on the box? I own an elite. I bought it because it was a good deal, not because it's an 'Elite'. Your argument might hold if we were talking about shopping for yachts. Just having a fancy name doesn't automatically make it a luxury item.

You do realize that Ferrari licenses their name and logo for exactly that purpose, correct? It seems to me your example proves the point, it doesn't dispel it. Elite signifies it's the top of the line model, that you can't get any better. The color scheme identifies it as such, just as a Ferrari logo would.

Either way, you're paying a premium for having something that is immediately distinguishable as the best. Paint it black and call it Elite or paint it red with a yellow Ferrari logo on it. It's the same thing. Only one doesn't cost MS royalties.

[BadTB25]

Originally Posted by obonicus

One problem with the black color is that it's harder to find accessories. It's shallow, but I've been thinking of buying one of those keyboards, and I'm sorta bugged that I can only find the white one. Same for stuff like Play 'n' charge kits -- I own one, but I'm slightly bummed that the battery pack, though black, is actually a different shade of black from the controller itself.

I rarely send messages via Live so it really isn't a concern at this time, although my friends have the messenger mini-keyboard which they seem to love.

[obonicus]

Originally Posted by RancidLunchmeat

Huh? The best deal to who? It was insanely expensive and only 'the best deal' if you were going to download movies and required a bigger HDD, or if you needed to use the HDMI input because that's all your TV had. For most people, the premium of the Elite made it far from the best deal. I bought an Elite because it was black, because I had an un-used HDMI input and because I planned on downloading movies and storing content on my 360.

Actually, I got an elite because I had a friend with a 360 and he was complaining about HDD space, even though he did not download movies. He downloaded only demos. If you had any intention to up your storage space, you were better off buying the console with the upgraded space to begin with. And that's not necessarily true anymore. But otherwise, yes, you're agreeing with me. You want more space, you want HDMI, it was the best deal.

You do realize that Ferrari licenses their name and logo for exactly that purpose, correct? It seems to me your example proves the point, it doesn't dispel it. Elite signifies it's the top of the line model, that you can't get any better. The color scheme identifies it as such, just as a Ferrari logo would.

Either way, you're paying a premium for having something that is immediately distinguishable as the best. Paint it black and call it Elite or paint it red with a yellow Ferrari logo on it. It's the same thing. Only one doesn't cost MS royalties.

Except it doesn't even do that! Unless you use your xbox live vision camera to make a picture of your elite for your gamerpic, no one will know what you own. I'll repeat: Just naming it elite does not make it elite. It's the most expensive 360, possibly positioned as an alternative to the more-expensive PS3, but again, this doesn't make it a luxury item. You can't seriously use the 'if you have to ask, you can't afford it' argument, not for a gaming console where you can easily break down the price! But this is off-topic, I fear.

[Rangers]

Originally Posted by obonicus

Well, okay. A lot of this hinges on how savvy the average customer is, and I can't argue on that because it'd just be baseless speculation anyway. But the thing is, the elite used to be a good deal. In fact, before HDMI became standard, it was probably the best deal if you didn't already own a 360. Even after HDMI became standard it was a pretty decent deal. It's just been made to look worse and worse comparatively: MS really hasn't done anything to make the package more attractive since it was released, relative to the other SKUs.



I think this is fairly silly. It's just a name. Why not create a new Premium SKU titled 'The Best', and draw a glass of champagne and a Ferrari on the box? I own an elite. I bought it because it was a good deal, not because it's an 'Elite'. Your argument might hold if we were talking about shopping for yachts. Just having a fancy name doesn't automatically make it a luxury item.

Well to the first part, I agree. They should sweeten the pot of Elite by throwing in a wireless adapter or something. Then again if they did that, it would probably become the most attractive SKU again, and I'm not sure thats a good thing, because it's the most expensive. So strategy wise, it's probably best to marginalize the Elite.

To the second part, that doesnt make any sense. The Elite is an sku targeted at a specific customer, who is not going to quibble over a few bucks.

[obonicus]

Originally Posted by Rangers

Well to the first part, I agree. They should sweeten the pot of Elite by throwing in a wireless adapter or something. Then again if they did that, it would probably become the most attractive SKU again, and I'm not sure thats a good thing, because it's the most expensive. So strategy wise, it's probably best to marginalize the Elite.

They could throw in, say, a year of Live, which really doesn't cost them anything, and adds to the perceived value of the console. The pessimist in me thinks that MS might phase out the Elite, and make the 120GB HDD scarce, now that it's not a big jump from 60GB anymore, which would also add to the appeal, I guess.

To the second part, that doesnt make any sense. The Elite is an sku targeted at a specific customer, who is not going to quibble over a few bucks.

Well, I don't agree, but I think we're straying off-topic.

[DrJay24]

Originally Posted by Rangers

The Elite is an sku targeted at a specific customer, who is not going to quibble over a few bucks.

Agreed, I love my Elite I can't stand the white consoles.

[BadTB25]

I want the Elite for the large HDD and I'd probably would quibble over a few bucks, then again I like to get the cheapest deal possible.

I'd probably be willing to wait, just to save a little or to get a pack-in when I get it.

One of the things that really irked me about the MGS4 PS3 bundle was the lowest quality composite cables for the "HD" machine. I ordered mine for a fairly cheap price at some website that I can't remember. I was certainly not willing to pay $30-$50 bucks at Best Buy, Walmart or Circuit City when I could get it for ~$5.00 to include shipping.

I maybe atypical though.

[infinity4]

I have the elite, console is good but I regret it simply because accessories never come out on black. I will trade this in once they have 65nm GPUs, then I will buy those in 60GB premiums.

[eastmen]

Originally Posted by DrJay24

The pro is down $100 with triple the HD space and added HDMI thanks in large part to competition. The reason it's not $199 now is probably the RRoD disaster costing them over $1B. Of course this works both ways, the PS3 has dropped in price, added features, etc. I'll ignore the Wii, I don't understand the draw, sales or pricing.

I was clearly talking about before this price drop. Read the post I was responding too.

Why do I care, I'm not a share holder, are you?

No , I'm a gamer and I care because the better the 360 does the more of a chance of a next xbox and the more money they will invst in it.

[bkilian]

Originally Posted by Rangers

I'm repeating myself on this subject but I dont see the Elite as all that out of line.

To make an Elite from an Arcade, you need to add:

+150 HDD
+15 headset
+hi-def cable ($3-$20)

I think you missed a few things:
XBox 360 Component cable (The arcade only has composite) - not an issue if you're using hdmi, but I don't. ($20)
Can of black Spray paint ($5)
Masking Tape ($2)
Paint fume mask ($2)
About 3 hours painting the damn thing to make it black ($7/hr? In my case, quite a bit more/hr)

So in my case, it would cost me about $150 more than the elite, and I'd have a black haloed spot on my garage floor.

Personally, I'd probably pick up an elite from the company store for a discount, since the store doesn't carry the arcade, but I haven't had much of an issue with HDD space on my old non-hdmi 20 gigger. I kinda want the 120GB drive, but I have no actual reason to get one.

Now I'm looking for a good home for my black HD DVD addon, since I scored a Toshiba HD-A30 when the HD DVD team imploded.