5 ways Microsoft fumbled the Xbox 360 Elite

1. Why a third SKU?
Sure, Microsoft is running a business. But it’s ridiculous to try and convince us it’s the only way they could have introduced a larger hard drive. Their argument is that by offering it as only an add-on, it would put new buyers in an awkward situation. If you want to get a new 360 w/ 120GB hard drive, you would either have to buy the Core + HDD and get skimped on the cables and wireless controller, or you would buy the Premium and have a left over 20GB HDD.

All true, and neither of these options are pleasant for a new customer. So why couldn’t you just absorb the extra cost and REPLACE the 20GB hard drive with 120GB? If you wanted to be really awesome, you could even throw that 20GB drive on the Core. Essentially the Elite would become the new Premium, and the current Premium would become the new Core. Sure, it’s not financially ideal, but last I checked your in the green for each console sold, unlike one of your competitors. Stay competitive! You could have used this opportunity to sway the decision of some people still sitting on the fence.

2. Why is HDMI only on the Elite?
Why didn’t the other two SKUs get the upgrade too? I thought the Elite was just for customers looking to get a new 360 with the 120GB drive… so why make it the ONLY path if you want HDMI? What about those of us that don’t give a crap about Marketplace content and just want to play games? Just because I don’t need the bigger hard drive, means I can’t have HDMI?

Microsoft’s big selling point for their two SKU model was that both boxes are identical. If you got a Core system, you could upgrade, at your own pace, to all the features of the premium SKU. All that went out the window. There is no option anymore–if you want HDMI, there is only one choice. Just add the damn port to all the models!

3. Why no WiFi?
Excuses aside, wifi is so cheap these days there is no reason it shouldn’t be included. The Wii is about HALF the price of the Elite, and it has built in wifi. Heck, the DS is only $30 more than Microsofts WiFi adaptor and that’s a full blown hand held gaming system with built in wifi! Sure, not everyone needs it, and it might not be good enough for streaming HD content, but last I checked, basic B/G is good enough for playing GAMES. For the measly price it would cost you, the perception of value would have been boosted enough to make it worth your while.

Building WiFi into the Elite and not the other models may seem to contradict number 2, but non-Elite owners would still have the option to UPGRADE to WiFi via the overpriced adaptor. If you offered an UPGRADE to HDMI (via a cable), there would be no issue. I understand that may not be technically feasible, which is why the hardware should have been upgraded across the board.

4. Why black?
And an ugly, matte, primer black at that. You bash your competition for FORCING things on their customer–like WiFi and Blu-ray. At the same time you tout that the Xbox 360 is all about choice. So what if I choose I want a black 360? Suddenly I’m forced to buy the most expensive SKU and the 120GB drive is shoved down my throat. The solution? Offer all the SKUs in both colors. That would be true choice.

Also, did anyone notice the controller is two-tone? The grey controls and bottom panel look putrid.

5. $180 for 120GB?!
Not directly related to the Elite, but given that it’s the reason for the new SKU gives me room to complain. I realize that there are added costs to put the drive in its pretty housing and slap your stickers on it, but the drive itself can’t cost you more than $50-60. You can buy a comparable drive on newegg for $85. Factor in Microsofts buying power, and that’s where I get that figure. $120+ for the housing, repackaging, etc is rape. It could have been priced much lower and remained profitable.

So WHY did Microsoft do this? First of all, to look more comparable to the PS3. When an uneducated consumer sees a $300-400 system next to a $500-600 system, the assumption is the the more expensive one is better. By adding a third SKU, Microsoft can still grab the frugal shopper, and directly compete in the “high-end” sector.

The other four points derive from this. To sell a more expensive SKU, they need to give some incentive. The hard drive is a no brainer, while the HDMI and exclusive color further separate the Elite from the rest of the pack.

While it’s logical, I don’t think it makes it right. If Microsoft wanted to look more comparable to PS3 on store shelves, they should have used different incentives and added value to market a third SKU. Such as? How about built-in HD DVD or *gasp* Blu-ray. Afterall, that’s the main reason the PS3 is at the price point it is at. For the rest of this small crap, Microsoft is just screwing over Core and Premium customers, and completely contradicting their philosophy of choice.