From a business perspective you must
1. Hit a mainstream price target =>
$300 is pretty much it. You HARDCORE gamers can argue $360 would sell, but if $360 sells $300 sells better... and a HDD does not scale well, so that added cost (lets say $40) is STILL $40 in 4 years. That is the difference between a $99 console and a $139 console in 4 years or a $149 console and $199 console in 2 years. To say, "$360 will sell" is REALLY short sighted from a market perspective.
2. Have a cost analysis for the launch AND long term => You must weight your losses NOW and your long term profitability. The console platform, at some point, MUST turn a profit. Your competition, Sony and Nintendo, will be aggressively hitting price points. Having expensive hardware that does not scale in price means the normal early losses that are typical but ALSO means losses down the road if you remain on a competitive price schedule. Xbox1 anyone?
So with that in mind, no, I don't think from a CORPERATE leadership position where you have promised investors a PROFIT in 2007 that including a ton of Memory or a large HDD is feasible.
It may meet the short term fans price points but you are also tacking on a large amount of money down the road. $50 more in components means 6-12 months longer to hit magic price points.
What is more important, from an investor POV: Hitting $199 in 2006 w/o a HDD or hitting $199 in 2007 with a HDD?
Ditto 256MB memory w/ HDD (just swap out HDD above).
The fact a HDD is a money loser can be seen with the Xbox1 and the fact Sony did not put one standard in the PS2 or PS3--even though Sony knew MS would have one standard. And MS had already, from the beginning, noted that games should work w/o the HDD.
As much as it may not seem like it, when you run a company you do not have unlimited funds. Tough decisions must be made. MS is trying to compete in the home console market which has historically shown to have certain significant price points ($299, $249, $199, $149, $99).
Screwing up my poll
and asking Balmar to create a new pricing market/goal for mass market penetration is another poll.
I say that because I am not convinced $149 with a HDD is more compelling to consumers than $99 w/o a HDD. Actually, I am pretty convinced hitting $99 is more important from a market perspective than the HDD feature standard.
Again, I dislike the move alot (hahaha if *I* was running MS I would take the loss and hve both LOL! But the scenario was you were Balmar, had helped build the company, had stock, and were accountable to investors) but I think the realities are clear: the HDD AND more memory were not going to hit the strategic price points.
Strateguc Price price points = more sales. More sales = more games & more money.
A HDD, this gen, has not been shown to be a "killer feature" that people are willing to spend more for. Having a lot of games on a reasonably priced console has been.
Ps- For the record most consoles undergo changes from the planned spec, even announced target spec, to the final release product. It is a fact of life and profitability. Yes it stinks it is no longer standard and bad from a support standpoint (basically it loses a lot of support) but as a market view you are the ONLY one doing it. Sony/Nintendo are NOT. With cross platform games important offering features no one supports is wasted money IMO.
I would not say that if more Xbox games made good use of the HDD. But for whatever reason it is really under used. Sad, but true.
