Xbox 360 price goes back to future

After two years playing nip-and-tuck with Sony, Microsoft is upping the price of its Xbox and introducing 'basic' and 'premium' editions of its next game terminal.

Microsoft said Wednesday its Xbox 360 will come in two flavors: Xbox Core Package, starting at $300, £210 in the UK and €300 in the Euro-zone. The full Xbox 360 is priced $400/£280/€400. Pricing for the intensively competitive Japanese market was not announced.

The details conform earlier reports that Xbox 360, expected this holiday season, was to be priced $299 in the US. The price was allegedly leaked by Wal-Mart employees.

Microsoft's pricing appears to send the signal that it will no longer compete in North America and Europe on price cuts. The Xbox Core Package price takes the Xbox back up to the terminal's November 2001 debut price point. A succession of reductions has taken the Xbox's price down to its current $149.

Microsoft engaged in price cutting as a response to Sony cutting the PlayStation 2's price tag and to also help kick start sales of the Xbox.

Increased prices and the 'premium' Xbox 360 seem to be an attempt by Microsoft to build on market share gained through those early cuts and hit a self-imposed profitability deadline for the Xbox of 2007. Microsoft has been making a loss on the Xbox, and - prior to May 2002's first Xbox price cut - was estimated to be losing between $76 and $105 on each Xbox terminal sold.

The Xbox 360 Core System will include the terminal, controller and customisable faceplate.

Gamers shelling out $400 will get the 20GB hard drive, Wi-Fi adaptor, Xbox Live Silver membership and - for a limited-time - an integrated control center enabling users to play DVDs and also access their Windows XP Media Center Edition 2005-based PC's controls from a single controller.

It's obvious which version Microsoft would rather you buy.

The 360 contains a three IBM PowerPC processors, each clocked at 3.2GHz and capable of handling two threads simultaneously. Each core has an AltiVec vector engine for handling multimedia data. The graphics sub-system is ATI's R500 chip clocked at 500MHz, with 10MB of memory built into the chip packaging. The console contains 512MB of GDDR 3 SDRAM, shared between the processors and the GPU.

For storage, the console has a 12x DVD-ROM unit. Up to four controllers can be connected to the machine, all wirelessly, and there are three standard USB 2.0 port too. Microsoft said the unit was "Wi-Fi Ready" - as we've seen, the adaptor card will ship in the Premium Edition bundle.

Microsoft also announced it had signed a third manufacturing partner to produce the console. Canada's Celestica joins Singapore's Flextronics and Taiwan's Wistron. Flextronics and Wistron manufacture the original Xbox, so were always likely to win Xbox 360 contracts, though this week's announcement marked Microsoft's confirmation of the arrangement. All three companies will produce the console in their Chinese factories. ®