The Price Wars, Begun Have They

As most probably already know, Microsoft has taken the what-some-might-call-bold move of releasing multiple editions of the 360. $299 for the "cheap" and $399 for the "not so cheap". Meanwhile, Kutagari has announced that Sony will start accepting loan applications for the pre-purchase of a PlayStation 3. Please have three forms of identification and a pay stub handy if you please.

So what is going on here? Well, one thing gamers have to remember is that the first XBox was by far the most subsidized game console in the history of game consoles. Microsoft may have achieved their sales and market goals, but they took a big bath of red stuff in the process. Their stated desire was to make the XBox division profitable by it's third generation. So obviously, the second generation has the pretty hefty task of making the division at least a little less crimson.

Hence, a more expensive system with more expensive upgrades. Sony signalling that they're willing to ask a decent chunk of change for their next set of hardware has undoubtably opened the playing field a little bit as well. However, since Microsoft is first to the diving board, they appear unwilling to remove the historical $299 price point from the table. So we get two editions.

In some ways, it's pretty smart. Provided that the "Core System" can be upgraded to have the same abilities as it's bigger brother, it might allow early adopters to step in without the additional $100 entry fee. The 20GB on the expanded system alone is worth $99, so the additional wireless controller, headset, Live account and HD cabling make the $399 a pretty reasonable amount for a bundle. On the other hand there's the extra confusion that the $299 setup isn't really $299. Without a hard drive, you'll have to at least get a memory card, and they're around $40. So you really have a bundle for $339, without a HD and extras, and a bundle of $399. The $60 spread there hardly seems worth the additional trouble.

I wonder if Microsoft has studied it's history well enough. Add-on systems have sold notoriously poorly for consoles. Sega tried it several times with absolute failure and the concept of an add-on hard drive has almost become an industry joke. This setup means that developers can't rely on gamers having a hard drive ... severely limiting it's functionality as a game add-on ... and we still haven't heard anything from Microsoft about HD-DVD ... but the last rumor was that it might be an after-market add-on as well.

By creating a lowball market, it seems Microsoft is selling the hard drive short. Not to mention things like WiFi and high density media. If the market can't fully bear down on the technology because they can't be sure of the audience, the consumers might not have much demand on it. If all the hard drive can do is hold media ... well, people already have an iPod for that these days.

The XBox 360 will sell well, I'm sure. In either configuration, it's an extremely powerful Media PC for the living room and offers cutting-edge gaming at bargain prices, even for four Franklins. Still, tiering the platform feels like a misstep and an opportunity for Sony and Nintendo to score a few points. If they can offer a solid package that's simpler for consumers and developers - they can probably still ask for more than $299 and win out here.

Course, last I checked the PlayStation 3 would bundle it's HD seperately as well, so maybe this is simply new age of configurable consoles.