120gb for $180 is a bit rough. compare it to 20gb for $100, however, and the larger hdd is a steal. isn't it about time to drop the 20gb in price a bit? or replace it with a larger drive?
i was thinking about this earlier, and i still stand by my statements that this new elite sku devalues the premium and effectively raises the psychological price of the system. if they're deadset on releasing it, they should recalibrate the core and premium systems as well. personally, i think they should increase the value of the core by making it include everything the premium has, sans hard drive. wireless controller, hd a/v cables, etc. then i would increase the size of the hdd in the premium model so that the disparity was not so great versus the elite; 60 gb seems like a nice round number. so my three sku strategy would be
core - $299, no hdd
premium - $399, 60gb hdd
elite - $479, 120gb hdd
in that sense, the only difference among the models is simply the hard drive. i add value to the core and, further, the premium retains its value versus the more expensive elite sku.
come fall and the expected hardware revision, i would drop prices and move the 60gb model to $349 and the elite to $399 and maybe drop the core to $279. i would also bundle in a game like kameo. ideally, microsoft would move the premium sku to $299, but that's probably too steep a drop to expect, the way microsoft has operated so far. they've existed at this higher price for almost 17 months, they're just going to drop $100 all at once? doubtful. so, $50 drop for this year ($20 on core), and another $50 next spring. come summer 2008, i'd certainly want my prices to be $249/$299/$349. again, it has been almost 17 months and by next summer it will be well over two years. it's time to get this sucker closer to mass market.
but, first things first, i think microsoft should evaluate the value of the premium. i think the elite makes it look bad.