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How does Aaron Greenberg(MS) say this with a straight face?

So, correct me if I am wrong, but I think a recent survey of customers indicated that a majority polled felt the price was too high for the new HD. Now, if this is an accurate sampling, then the comment by Mr. Greenberg is essentially a sales pitch for ease of install of the HD to justify the price in response to the complaints. Fair enough. But what I disagree with is how MS is handling this pricing with regards to those who already purchased a premium system, especially in the last few weeks. This strategy seems to benefit those who bought a core more than those who bought a premium. I am sure that people might have held out a little longer if they would have known that this drive was coming and it was going to be significantly more in both price and size. Perhaps this is why it was the worst kept secret in the last month or so. But nonetheless, those that bought a premium and are interested in using their console for more than just games have just now found out that they have a 20gb hard drive that is actually close to 14GB that is essentially worthless and will have to buy a $180 hard drive to enable their system to have the capacity it will need. It makes the whole premium thread look like a bigger retard pack now or perhaps better term would be a "sucker" pack.
 
For supposedly smart folks (i.e. internet savvy gaming geeks) gaf readers never cease to amaze me with the complete and utter lack of the slightest shred of business acumen. The reasons the MS person listed are all very viable reasons for the price of the drive. Consumers pay for value, real or perceived. For most customers, plug and play has significant value. Second, the price for the drive seems reasonable comparable to POWERED, external, USB drives purchased through big box retailers, the primary channel for XBOX products.

Taken another way - price is 179. Retailer margin is probably at least 20 and maybe be closer to 40 as retailers tend to make a larger margin on accessories than consoles. That gets us down to about 149 on average. Take off shipping and handling, down to 145. MS QC, software load, formating ect maybe as much as $10 in labor and licenses, down to 135. Assuming a COGS of 100-110, that leaves MS with a profit of $30ish. A margin of 16-17% is not a raping by any strech of the imagination.

Is it expensive, of course, but it is not overpriced given the current market conditions.
 
arne said:
all they're doing is adding a SKU with a larger (and more) expensive HDD. there's no "extra features tacked on to keep the price high."

there is no price drop, all you're doing is paying for the bundled in 120gb HDD instead of paying for it separately.


I guess, the only other alternative if they wanted the HDD to be $180 is to wait until they could drop the price $80 and offer the premium at the same price with the 120gb HDD. but there's no reason for a price drop right now. and there's PLENTY of reasons for a larger HDD.
Click to expand...
That's the conflict MS is in. Sales are up from last year, the main competition isn't banging at the gates in sales terms (Sony) and the upcoming software lineup is very strong. On the flip side, they're a year and a half into the life cycle, on the long side of when consoles usually drop in price the first time. The sense is, a drop is coming this year. There's lots of ways to handle the introduction of the larger HDD and SKU, but I think it should have corresponded with a price drop so the SKUs line up at $199, $299 and $399. Shift the mix in the box if they have to. MS is in the awkward position of possibly introducing a higher-priced SKU and then dropping the price on it inside of six months.
 
http://www.newegg.com/Product/Product.aspx?Item=N82E16817155704
http://www.newegg.com/Product/Product.aspx?Item=N82E16822149057
Ok as you can see you can get a 120 gb sata 2.5 hdd for under 100 WITH the enclosure.
(Let me say that I probably would not choose these products for my own use)
That being said, this really would not be indicative of what a company like MS could actually sell an item to the end user for. Take into account not only the packaging, as well as the fact that these items cannot be shipped OEM format. Can you imagine how the average gamer would take it if there new hdd came in bubble wrap with the instructions attached to the hdd with a rubber band?
Gaming this generation has really gone alot higher in the price department then any generation before it. I mean even the cheapest of the 3 systems has retardedly high prices for controllers. 60 dollars for a controller capable of playing alot of the games on a system is VERY high regardless of the tech inside. Video games for as much as we all may enjoy them are still a toy.
I really hope MS offers a trade up program for those who already have a 20G hdd to get the larger size, especially with the changes they have made concerning digital distribution of media.

As primarily a PC gamer with a high end machine I am used to paying a premium for gaming, but accesories this gen are really getting out of hand.
 
GhaleonEB said:
That's the conflict MS is in. Sales are up from last year, the main competition isn't banging at the gates in sales terms (Sony) and the upcoming software lineup is very strong. On the flip side, they're a year and a half into the life cycle, on the long side of when consoles usually drop in price the first time. The sense is, a drop is coming this year. There's lots of ways to handle the introduction of the larger HDD and SKU, but I think it should have corresponded with a price drop so the SKUs line up at $199, $299 and $399. Shift the mix in the box if they have to. MS is in the awkward position of possibly introducing a higher-priced SKU and then dropping the price on it inside of six months.
Click to expand...

maybe they don't drop the price on it in six months anyway?

ps2 spent a year and a half at $299 and 2 years at $149 and coming up on two years at $129. so, yeah, who knows, those aren't $299+ price points, but the point is companies are going to keep it as a particular price point until they see fit to lower it. I just don't see why (in the US) that point has reached yet. And I'll say the same for Nintendo or Sony if they have the HW and SW sales at this level a year and a half in their life cycles.
 
arne said:
all they're doing is adding a SKU with a larger (and more) expensive HDD. there's no "extra features tacked on to keep the price high."

there is no price drop, all you're doing is paying for the bundled in 120gb HDD instead of paying for it separately.


I guess, the only other alternative if they wanted the HDD to be $180 is to wait until they could drop the price $80 and offer the premium at the same price with the 120gb HDD. but there's no reason for a price drop right now. and there's PLENTY of reasons for a larger HDD.


the rest of your points. who knows what the strategy is, but it's my opinion that it's not quite as dire as you paint it. sony and ms determine strategy at least 6 months ahead of time and nothing in this business is totally reactive. sony may have an opportunity here, but it's going to be by the end of the year before they can really take advantage of it and by then, the rules might have changed due to software, sales who knows in EITHER camp.

shrug.
Click to expand...

Our limited history with these multi-sku consoles has shown the people gravitate towards the most fully featured and expensive sku. What MS has done is essentially raised the price of 360 to $480. Which is the last thing they needed to do at this point in time.
 
arne said:
maybe they don't drop the price on it in six months anyway?

ps2 spent a year and a half at $299 and 2 years at $149 and coming up on two years at $129. so, yeah, who knows, those aren't $299+ price points, but the point is companies are going to keep it as a particular price point until they see fit to lower it. I just don't see why (in the US) that point has reached yet. And I'll say the same for Nintendo or Sony if they have the HW and SW sales at this level a year and a half in their life cycles.
Click to expand...
That's clearly a possibility. Certainly introducing this SKU on top of the existing points sends a signal that prices are not dropping any time soon, so the six months I referenced would be the earliest I'd expect anything.
 
http://www.digitimes.com/systems/a20070328PD220.html

Other changes in the game console supply chain may be seen for the production of the Xbox 360. With the launch of Microsoft's Elite version, the company is preparing to reduce prices on other Xbox 360 models and has expressed its wish to reduce quotes from its three major assembling partners, namely, Celestica, Flextronics and Wistron. If any of these players seems disinclined to accept the lower quotes, there could be some shakeups in that supply chain as well.
Click to expand...

:)
 
Seriously MS, let us install our own HDD's already like Sony does. You don't need to nickel-and-dime us on everything and you'd probably make more $$$ that way in the long run due to more people taking advantage of the Video Marketplace.
 
There are so many holes in the Elite strategy, the only reason why they would rush this out is that they think HDMI is relevant. Maybe people are downloading lots of videos, I'm not one of them. I'm sure I'll need a bigger HDD at somepoint, and HDMI too when I get my HDTV. Most people won't ever need larger than a 20 gig HDD, I personally have 10 gigs free right now myself with at least a couple gigs of demos that I could delete on top of that. Still it just seems like it's bad timing.

I think the main reason they're getting this out now is cause it's pretty clear HDTV is done so they have to accelerate their Live Video plans, especially with Apple TV out as well. Blu Ray is irrelevant to MS cause Live can deliver HD movies now and has HDMI. The only problem is that you don't own the movies, another hole in their strategy I think. $479 makes even the $500 PS3 look a lot more attractive for now.
 
arne said:
maybe they don't drop the price on it in six months anyway?

ps2 spent a year and a half at $299 and 2 years at $149 and coming up on two years at $129. so, yeah, who knows, those aren't $299+ price points, but the point is companies are going to keep it as a particular price point until they see fit to lower it. I just don't see why (in the US) that point has reached yet. And I'll say the same for Nintendo or Sony if they have the HW and SW sales at this level a year and a half in their life cycles.
Click to expand...

65 nm means a drop is should be coming. MS tactics to ensure profitability can hurt them in the long run, the opportunity they have to take marketshare and maybe even win this gen are slipping away. Shoddy hardware, overpriced add on accessories, no next gen disc drive, charging for online, meager retro software downloads. Those are all big strikes against them and as time goes on it makes the 360 look less attractive. PS3 on the other hand is very open. You can use Blutooth accessories, off the shelf HDDs, USB thumbdrives, all sorts of other flash media, free online, web browsing, etc. However the biggest long term advantage Sony has is Blu Ray and it's an advantage MS can somewhat counter with Video Marketplace and IPTV but not really.
 
Vyer said:
God, this is like the 'PS3 drops 82%!' thread all over again.
Click to expand...

True. Except this thread is more like "Xbox 360 Price Increases 20%. MS Tells Consumers, 'Hard Drive Installations Need to Be Expensive and Easy To Help Meet The Needs of Our "Special" Customers. And for those who bought our Premium console, Look over there! It's Metal Gear Solid 4!' runs"
 
arne said:
maybe they don't drop the price on it in six months anyway?

ps2 spent a year and a half at $299 and 2 years at $149 and coming up on two years at $129. so, yeah, who knows, those aren't $299+ price points, but the point is companies are going to keep it as a particular price point until they see fit to lower it. I just don't see why (in the US) that point has reached yet. And I'll say the same for Nintendo or Sony if they have the HW and SW sales at this level a year and a half in their life cycles.
Click to expand...

The X360 definitely ain't no PS2. If MS thinks they can afford to follow the PS2's footsteps they're off their rockers. They better go in for the kill now lest it come back to bite them in the ass.
 
Kangu said:
The X360 definitely ain't no PS2. If MS thinks they can afford to follow the PS2's footsteps they're off their rockers. They better go in for the kill now lest it come back to bite them in the ass.
Click to expand...

i wasn't making that direct comparison nor was i saying MS thinks so. I was just going by the only historical precedent on timing that exists.
 
m0dus said:
Just a clarification--the HDD you linked is IDE, not SATA. That difference seems to factor in heavily in the price-point (remember, SATA has a lower voltage-draw, and (IIRC) produces less heat).
Click to expand...

It's only a chipset/interface difference, the underlying hardware is no different, certainly not 2x the price different.

Heres a sata internal model of the same size for the about $15 less, about how much the enclosure costs probably:

http://www.newegg.com/Product/Product.aspx?Item=N82E16822136072
 
snack said:
The thing is that Microsoft is buying these in bulk so they are paying less than what we would pay. They probably buy each one for about $125. They should pass the savings off, by charging like $150
Click to expand...
Not necessarily. They (MS) will have a contract to buy hardware from the manufacturer at a set price determined in advance, and this price is not necessarily the same that you would pay at retail or wholesale.

For example, the company I work for has tens of thousands of workstations purchased from IBM and HP. You would assume that we would get a better deal on the PCs than what you would pay for the same computer at retail... but that assumption would be wrong. The fact is that the PCs that we have cost us approximately $1200 each yet if I were to buy a similar PC at Best Buy I could get it for closer to $600.

EDIT: I am not saying that the price MS is charging for the 120GB (or the 20GB for that matter) is good, I'm just saying that the price that they (MS) paid for them is not necessarily what we could get them for. IMO, the best option would be for MS to give us a "legitimate" way to buy our own hard drive and install it into the MS enclosure. They could still sell the pre-formatted one for the current pricing for the type of people who would otherwise purchase their PC parts at stores like Best Buy, but just give those of us who like to use the smaller OEM type shops to get a better deal.
 
Wow another 360 Elite bitchfest :\
Don't want the 120gb ? don't buy it.
What Aaron Greenberg said kinda makes sense.
 
ElNino said:
Is the MS hard drive 7200 or 5400? Trying to do some comparative pricing I came up with these from TigerDirect.

For external 2.5" hard drives I could only find 120GB drives with 5400RPM and this Seagate model is $132.99
http://www.tigerdirect.ca/applications/SearchTools/item-details.asp?EdpNo=2244253&CatId=2424

For internal 2.5" hard drives a 7200RPM model with 100GB capacity (Hitachi) is $152.99.
http://www.tigerdirect.ca/applications/SearchTools/item-details.asp?EdpNo=2244253&CatId=2424

Comparing to these prices the MS drive isn't priced "that" high, especially compared to what you would pay for something from one of the bigger box stores. In fact, the MS price is pretty cheap compared to what HP charge for their similar product.

http://www.futureshop.ca/catalog/proddetail.asp?logon=&langid=EN&sku_id=0665000FS10083489&catid=
Click to expand...
15_damage_control_L-1.jpg


Go look on Newegg
 
Ugh, this whole thing just gives me bad Sega Genesis vibes. I want to buy a 360 at some point, but not until the price drops. Introducing the more expensive Elite makes me hesitate to buy a 360 any time soon, and I'm probably not the only one.

Consumer confusion = bad.
 
I really don't understand why they don't have an affordable upgrade path for existing users. It's so obnoxiously dumb. Who in their right mind would ever buy that $180 HDD accessory? If it was $100 for 60GB or something then I could see people going for it. I think I'd rather buy a DS, PSP, Wii, or PS2 instead of buying a stupid HDD for my Xbox 360.

They keep talking about how this pricing makes sense for Core users, but what about the majority of Xbox 360 owners who are not Core users? For whom does it make sense to spend $580 on an Xbox 360 and have an extra 20GB HDD with a Gamestop trade-in value of $30? Is the assumption that anyone who buys a 360 pro will never want to upgrade the HDD, because that seems to be the way that they've set it up.

I think Aaron Greenberg is by far the worst PR guy at MS. Nobody at MS aggravates me as much as this shill.

$450 for the Elite and $150 for the HDD would have been the upper limit of what would have been an acceptable pricing for what they are offering. But even at $150 there's not a realistic upgrade path for premium owners. They really need a middle of the road HDD that is reasonably affordable.
 
What really sucks is for the consumer that could've used the Elite (really needs the space), and bought a Premium recently... Now they're going to have to pick up a 120GB HDD, boosting the cost of their 360 effectively to $580... I know it happens all the time, and in other markets as well, but, it's harsh when you think about it, and feel bad for those people...

I wonder what MS pays for these drives though... You know they have to be making a killing off them...
 
kaching said:
Are you auditioning for an MS PR role? Screwdriver set? delicate drive?
Click to expand...

Not to advocate the overpriced drive but it's true that most people don't have any idea how to handle components. I'm willing to bet that most consumers wouldn't be able to tell you why you wouldn't want to set an exposed HDD (Or motherboard, or CPU) down on carpet.

Those of you who are saying that standard drives are plug-and-play are missing the point. In order to plug a standard drive in, you have to open your computer. For the daring few that actually kept going past this point, you'd have some that wouldn't know whether or not the system should be on or off when installing a new component (Assuming they figure out how to get power to the drive and how to set the jumpers correctly).

A lot of you are taking your technical prowess for granted; the average consumer is an idiot. It's a harsh truth because most of our families fall into this realm of completely lacking technological know-how, but it's a truth you must come to accept. I'm willing to bet that almost every one of us has been approached by family and friends with a problem that needed to be fixed by "the computer guy".
 
f_elz said:
Don't want the 120gb ? don't buy it.
Click to expand...
Want the 120GB. Don't want to pay $180 for it. Won't buy it. Will subsequently buy less online stuff from Marketplace. MS lose.
 
AzureNightmareXE said:
15_damage_control_L-1.jpg


Go look on Newegg
Click to expand...
Why are you directing that at me? I couldn't care less what MS prices their hard drive at as I rarely ever go below 10GB free. I was only trying to find some comparable prices from places where people are likely to buy hard drives from. Of course the type of person who would post on a gaming message board would be able to find a better deal on a hard drive, but how much of the market to we represent... maybe 1% if that I'd guess.
 
ElNino said:
Why are you directing that at me? I couldn't care less what MS prices their hard drive at as I rarely ever go below 10GB free. I was only trying to find some comparable prices from places where people are likely to buy hard drives from. Of course the type of person who would post on a gaming message board would be able to find a better deal on a hard drive, but how much of the market to we represent... maybe 1% if that I'd guess.
Click to expand...

You were using Canadian prices though.
 
JCBossman said:
Please the think isn't VASTLY overpriced, I for one prefer MS, strategy to Sony on a certain level, I can take my protected HD off the system go to a friends house slap it on his 360, without breaking out a screwdriver set and handling a bare delicate drive. If this thing MSRP'D for 149 and the 20gb for 69 it would be a VERY fair price, Look at controllers I have NEVER paid more than 40 for one, check it out at amazon.There Will be on line sales bringing this into the 149 area.
Click to expand...



Much, much better spin.......welcome to MicorSoft....you start monday :D
 
JCBossman said:
Just to clarify,You can D/L pay content to a Thumb drive on the PS3, and play that content on another PS3?
Click to expand...

PSN currently has no pay content other than games which you can't carry over physically but if you want to transfer content over, all you have to do is give your account info to your friend and he or she can download it for free.
 
WickedAngel said:
A lot of you are taking your technical prowess for granted; the average consumer is an idiot.
Click to expand...
Not at all, I'm assuming anyone without the technical prowess can always get someone else to install it for them. I'm sure Best Buy's Geek Squad or the like would be the "average" consumer's goto for installation if they really wanted the extra space but didn't trust themselves enough to install an hdd.
 
kaching said:
Not at all, I'm assuming anyone without the technical prowess can always get someone else to install it for them. I'm sure Best Buy's Geek Squad or the like would be the "average" consumer's goto for installation if they really wanted the extra space but didn't trust themselves enough to install an hdd.
Click to expand...


yeah for $40-$160...
 
-ImaginaryInsider said:
Fun Fact: To escape the grip of a crocodile's jaws, push your thumbs into its eyeballs-it will let you go instantly.
Click to expand...

The same can be applied to sharks, or you could just stay out of the water.
 
kaching said:
Not at all, I'm assuming anyone without the technical prowess can always get someone else to install it for them. I'm sure Best Buy's Geek Squad or the like would be the "average" consumer's goto for installation if they really wanted the extra space but didn't trust themselves enough to install an hdd.
Click to expand...

Do you have any idea what Geek Squad would charge to upgrade your PS3 hardrive? I'll give you a hint, the 360 120GB drive would be cheaper.
 
Tobor said:
Do you have any idea what Geek Squad would charge to upgrade your PS3 hardrive? I'll give you a hint, the 360 120GB drive would be cheaper.
Click to expand...
Looks like $40 according to the link ImaginaryInsider posted. Since what I'm asking for is a lower priced drive to begin with, then the 'average joe' some people are leaning on to justify MS's current pricing still has the potential to pay no more than that.
 
kaching said:
Looks like $40 according to the link ImaginaryInsider posted. Since what I'm asking for is a lower priced drive to begin with, then the 'average joe' some people are leaning on to justify MS's current pricing still has the potential to pay no more than that.
Click to expand...

Read the link again. It's $89 to install a hard drive at the store. Hard drive not included of course. (They also charge $129 to install an OS. How awesome is that?)

You can spin this any way you want, but expecting your customers to be smart enough to install hard drives is ludicrous. MS's solution might be more expensive, but it's elegant and idiot proof.
 
Barnolde said:
Fun fact: You can put your own in the PS3. Real choice vs illusion of choice.
Click to expand...

Fun Fact; Most people couldn't differentiate between a laptop HDD and a standard 3.5", let alone being able to order one from that while specifying the type of data transfer cable to be used in conjunction with the motherboard.

You're not being realistic here. You're applying your own knowledge to all. We are not the status quo.
 
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