Wednesday, September 27, 2006

Microsoft Press Announcement: HD-DVD

Microsoft announced the details today of the HD-DVD add-on for the 360 (thanks Gamespot):
Microsoft has announced that the HD-DVD add-on for the Xbox 360 will arrive in North America, UK, France, and Germany in mid-November, right around Sony's planned US launch of the Blu-ray-equipped PlayStation 3.

When it hits stores in North America, the Xbox 360 HD-DVD player should retail for $199.99. Gamers in the UK can expect the player to run them £129.99 ($245), while those in France and Germany can expect to pay 199.99 euros ($254) for the hardware. All these prices have been called "estimated retail prices" by Microsoft, which noted that the actual retail price may vary.

The pack-in movie will be Peter Jackson's King Kong.

There are two interesting angles here. The first is that there will be 8-10 million people who already have the 360. How many will pay an additional $200 to get HD-DVD?

And while that's a pretty persuasive add-on price, if you're starting from scratch, the HD-DVD drive and the premium 360 will cost $599, which isn't persuasive at all. It's particularly not competitive if Sony drops the price on the 20GB PS3 like they did in Japan (they're crazy if they don't).

Just two months ago, it looked like essentially zero competition between Microsoft and Sony this fall in terms of price, but that Japanese price drop, and what it might portend, is the wild card. Expect Microsoft to create a bundle with the 360 and the add-on HD-DVD drive for $549, at most, and don't be too surprised if they do it for $499--at the same time they drop the price of the 360 by $50.

Next year should be a very good time to be a gaming consumer when it comes to consoles. The fact that this is both a console war and a format war should create an environment where both Microsoft and Sony have to fiercely compete with each other.

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