Microsoft’s Xbox price cuts are welcome, but make sure you do the math

[9 September 2008]

By Victor Godinez

The Dallas Morning News (MCT)

This week’s price cuts on the Xbox 360 console are a smart move by Microsoft.

Overdue, but smart.

In case you missed the announcement, here’s the skinny:

The Xbox 360 Arcade dropped from $279 to $199.
The Xbox 360 Pro went from $349 to $299.
The Xbox 360 Elite went from $449 to $399.

So now you can get an Xbox 360 Arcade for less than the cost of a Nintendo Wii ($249) and much less than the cost of a PS3 ($399).

If Microsoft didn’t insist on charging exorbitant prices for its Xbox 360 hard drives, I’d be much more impressed.

The main difference between the three systems is that the Arcade comes with a 256-megabyte memory card (sufficient for saving your game progress but useless for downloading almost anything from Xbox Live), while the Pro includes a 60-gig hard drive, and the Elite comes with a 120-gig drive.

So prospective Xbox 360 buyers are stuck with the same question they’ve had to wrestle with ever since Microsoft decided to go with this ridiculous trinity of models: Should I buy the cheapest model and buy a hard drive separately or just fork over for the bundle?

Let’s do the math!

A 20-gig Xbox 360 hard drive runs $89, or you can get the 120-gig for $149.

Now, before we go any further, it needs to be said that these are outrageous prices. You can easily find a 500-gigabyte standard external hard drive for a PC for $99. So, with the 120-gig drive, Microsoft is charging 50 percent more for about one-fourth the capacity.

Kind of puts the price cuts on the console itself in perspective.

Anyway, if you buy the Arcade at the new price and get the 20-gig drive separately, you’re looking at a total cost of $290.

If you get the Arcade and a 120-gig drive, it will cost a total of $350.

So, yes, you probably are better off getting the Arcade and a separate hard drive.

The Elite does come with HDMI and Ethernet cables for high-def video output and connecting to the Internet, respectively, but the high-quality cables at monoprice.com are so cheap that you’ll still come out ahead if you really need those cables.

So there you have it.

Regarding the PS3 and Wii, though, I wouldn’t expect any price cuts for the rest of this year. Nintendo is still basically selling every Wii that it puts on store shelves, so why forfeit money that customers have shown they’re happy to hand over?

And while the PS3 probably does need a price cut, Sony has said that it won’t be reducing the price between now and the end of the year. The multibillion-dollar loss that the company has already taken on the PS3 needs to be recouped at least in part.

If sales of the Xbox 360 go through the roof with the new cuts, though, Sony might be forced to follow suit. But I’d bet these are the prices we’re going to be seeing through the rest of the year.

So feel free to get started with that early Christmas shopping.

Published at: http://www.popmatters.com/pm/article/microsofts-xbox-price-cuts-are-welcome-but-make-sure-you-do-the-math/