Xbox360 with internal HD-DVD drive in the future?

[expletive]

This is purely a toshiba PR-head making noise. I don't see why some people get so excited about that.

And I sure as f**k hope those people aren't some of the same ones who have bashed sony for including a bluray drive in PS3 by the way.

To be fair, there's a big difference between offering a 'version' with an HD-DVD drive and forcing people to pay a premium for a BR drive to play PS3 games.

 

[chroniceyestrain]

Wouldn't it be smart to a wait for a winner in the format war before doing something like this?

 

[Angelcurio]

I dont think that this would make sense from a business perspective. A third Xbox 360 SKU with an internal HD-DVD drive would only alienate the Average Joe, 3 SKU is just too much for a games console.

Also, i do not see what would be the benefit for microsoft in doing so, specially when they really want to decrease manufacturing costs of the 360 so a price drop could be made earlier.

 

[Sis]

I dont think that this would make sense from a business perspective. A third Xbox 360 SKU with an internal HD-DVD drive would only alienate the Average Joe, 3 SKU is just too much for a games console.

Also, i do not see what would be the benefit for microsoft in doing so, specially when they really want to decrease manufacturing costs of the 360 so a price drop could be made earlier.

I disagree with your first point--I don't think there's any confusion or alienation given that the consumer would be paying more for the console with an HD DVD drive.

But the second point rings true: there is no benefit to Microsoft, only negatives. Their manufacturing and retail fulfillment becomes more complicated with the only upside being the ability to say "we have HD movie capabilities." Unless there was a price advantage by adding HD DVD playback (by upping the MSRP, an unthinkable act--one would think...), there is no real upside to the Xbox division.

However, adding an external add-on gives Microsoft an additional stand-alone revenue source.

 

[expletive]

But the second point rings true: there is no benefit to Microsoft, only negatives. Their manufacturing and retail fulfillment becomes more complicated with the only upside being the ability to say "we have HD movie capabilities." Unless there was a price advantage by adding HD DVD playback (by upping the MSRP, an unthinkable act--one would think...), there is no real upside to the Xbox division.

However, adding an external add-on gives Microsoft an additional stand-alone revenue source.

I would say that MS does have a bit to gain from the propogation/ success of HD-DVD.

We have to first make the leap that an HD-DVD equipped 360 would *help* the format in the same way the PS3 may help BR.

1. MS is building vista and all its media center streaming capabilities around HD-DVD. They need the format to be successful so theres actually content to be utilized here.

2. A prolonged format war hurts Sony more than MS becuase it devalues the standard (and costly) BR drive in the PS3. People are going to have a harder time paying 500-600 for a console with an HD media format that isnt 'standard' or at least 'winning'. Having the 360 shipping with an HD-DVD drive will go a long way in having consumers perceive the 2 formats on equal footing.

If consumers wish to keep their $$$ on the sidelines in the Optical HD format war, then MS has a solution for them, the current premium or the core, Sony doesnt.

 

[scooby_dooby]

We have to first make the leap that an HD-DVD equipped 360 would *help* the format in the same way the PS3 may help BR.

It won't help though unless MS bundles it in early, and subsidzies the drive like Sony. Which would drive their costs up.

It's just not gonna happen, MS is in a sweet position right now, no need to do anything dumb. Just get the core down to $199, keep the great games comin, and watch the market share roll in.

 

[Sis]

It won't help though unless MS bundles it in early, and subsidzies the drive like Sony. Which would drive their costs up.

It's just not gonna happen, MS is in a sweet position right now, no need to do anything dumb. Just get the core down to $199, keep the great games comin, and watch the market share roll in.

Exactly. Microsoft left behind the opportunity to force HD DVD on the market when they released a DVD version of the Xbox 360. Now their options are down to offering the consumer choices (and adding a SKU that includes an internal HD DVD is a choice that the market could ignore).

Now their options are limited to helping HD DVD along by offering the standalone drive, which gives them this new revenue stream, or adding a new SKU, which could be costly and has more downsides than upsides for Microsoft.

 

[expletive]

So neither of you think that a $399 HD-DVD equipped premium by year's end makes any sense? This would take their cost savings and dump it right back into a new SKU, while also price-reducing the current premium and cores to the rumored area of 329/229. Obviosuly the numbers would have to fall in line nicely but i see it as feasible, albeit not likely.

 

[Shifty Geezer]

Someone somewhere would be swallowing a lot of loss with that. MS won't make any money from the HDDVD movie sales (well, they'll make some from VC-1 encoding etc. but not direclty like games). Where's the sense in taking a loss on the hardware when that loss isn't directly going to result in returns on sales from content?

 

[Sis]

So neither of you think that a $399 HD-DVD equipped premium by year's end makes any sense? This would take their cost savings and dump it right back into a new SKU, while also price-reducing the current premium and cores. Obviosuly the numbers would ahve to fall in line nicely but i see at feasible, albeit not likely.

Right. I could see a $599 version making sense, especially after the cost savings, though I wouldn't think it likely. But to take the cost savings and apply it to a new SKU in order to subsidize HD DVD doesn't make sense in regards to the Xbox profitability, unless Toshiba is doing the subsidizing by offering HD DVD drives at DVD drive prices.

The Xbox group must strive for profitability at all costs and adding an HD DVD internal drive doesn't seem the best approach for that. If the task was "What's the best way to enter the high def movie format war?" then I'd agree...

 

[Angelcurio]

So neither of you think that a $399 HD-DVD equipped premium by year's end makes any sense? This would take their cost savings and dump it right back into a new SKU, while also price-reducing the current premium and cores to the rumored area of 329/229. Obviosuly the numbers would have to fall in line nicely but i see it as feasible, albeit not likely.

Well, personally i dont think this could be possible for a couple of reasons. At least not in the near future.

Toshiba is allegedly losing as much as $200 on each stand alone HD-DVD. So a $399 HD-DVD equipped Xbox 360 would be almost impossible to make without some heavy, and i really mean heavy subsidizing. Add to those numbers that microsoft is also losing money in each 360 console that is being manufactured, and the combined loses would reach astronomical levels.

Then we have the yields problem. You are a big company, with 2 heavy competitors launching their consoles in the near future, just in time for christmas, why add a component that is not readily available in the market, and that would only decrease your console yields? and in a time when your two biggest competitors will be launching their respective consoles? I dont think that it would be a smart thing to do.

And last but not least, turn a profit. Microsoft lost almost 2 billions last generation, so i supposse that one of their main objectives with the xbox 360 is to make a profit as soon as possible. And addi a a drive that costs as much as your console to manufacture, would not be very wise for achieving that goal.

Well, just my two cents.

PS: Once again, sorry if my english is not clear enough, i really try to write as clear as possible.

 

[scooby_dooby]

Actually Toshiba has recently denied the rumours that they're selling for a loss at all.

So neither of you think that a $399 HD-DVD equipped premium by year's end makes any sense?

Probably would be more like $499 no? It just seems too complicated for the consumers imo, you would have a total of 6 sku's w/ all 3 consoles combined, and it would make the DVD based 360's look less attractive as well, somewhat dampening any price advantage the 360 has over PS3.

By keeping it as a peripheral, they can serve the AV enthusiast without any major impact on their SKU's, I think this is the ideal approach.

 

[expletive]

Actually Toshiba has recently denied the rumours that they're selling for a loss at all.

Probably would be more like $499 no? It just seems too complicated for the consumers imo, you would have a total of 6 sku's w/ all 3 consoles combined, and it would make the DVD based 360's look less attractive as well, somewhat dampening any price advantage the 360 has over PS3.

By keeping it as a peripheral, they can serve the AV enthusiast without any major impact on their SKU's, I think this is the ideal approach.

6 SKUs? We may not be talking about the same thing. I'm saying 3 SKUs, Core, premium, and Premium + HD-DVD. $249, $349, $449 by year's end.

Since the current DVD drive is about $25, if you tack on another $100 that gives MS $125 to put an HD-DVD drive in, shouldnt that cover its cost? My understanding was that HD-DVD was always cheaper than BR, from hardware to media.

 

[RobertR1]

I doubt we'll see this by the end of the year but I certainly would not be surprised, if HD DVD does win out, to see it integrated at a later date.

As the BoM on the 360 and HD DVD drives drops over time, MS could integrate HD DVD into the console and maintain the $399 price while making even more profit than having to do a price drop. DVD would still be used for the games but the HD DVD playback capabilities would be built right into the console.

Right now the safe bet is going with the Add on until the winner is decided, if either one wins enough for mass consumer appeal, let's not forget what winning thing was isn't just beating each other but having to take on DVD, which will not be easy.

 

[scooby_dooby]

6 SKUs? We may not be talking about the same thing. I'm saying 3 SKUs, Core, premium, and Premium + HD-DVD. $249, $349, $449 by year's end.

I'm talking about all the systems. Consumer waks into store they can buy either:
a) X360 Core
b) PS3 Base model
c) Wii
d) X360 Premium
e) PS3 Premium
f) X360 Ultra

I mean, at some point you're hitting consumer overload here.