Microsoft Unveils 60GB Xbox 360, Obsoletes 20GB for $300

We knew a price cut for Microsoft's mid-grade Xbox 360 was imminent, but who knew it'd be such a tempest in a teapot? Instead of a permanent price drop on its "Premium" 20GB $350 model, it turns out that Microsoft's merely discounting that model and selling it for $300 "while supplies last."

In its place, the company says it'll sell a new 60GB version for $350, identical to the 20GB version except for the 40GB bump.

Check the gigabyte delta here: With just 40GB more at a $50 markup, your upgrade cost per gigabyte (CPG) comes out to a whopping $1.25. Now that's technically the wrong way to estimate "true" CPG, but it appropriately drives home the magnitude (or should I say triviality?) of the update. By comparison, the CPG on a $130 250GB 7200rpm 2.5" SATA hard drive is about fifty cents.

A trifle underwhelming, no?

Back in 2002, at a roughly analogous point in the PlayStation 2's life cycle, Sony dropped the PS2's price by an astonishing third (from $300 down to $200). The PS2 was leading 10-to-1 at that point, but Sony took the potential threat from Microsoft's Xbox seriously, and as history now illustrates, that kind of thinking paid dividends. Today, Microsoft's leading by a much smaller margin than Sony had back in 2002 (the Xbox 360's only up by about 6 million systems worldwide). Why Microsoft isn't willing to make a summer price commitment to consumers is anyone's guess, but if ever there was a time to get aggressive, it's now (and pre-E3). Playing "wait-and-see" while peddling a token storage update is about as un-intrepid as it gets.

Regarding the 20GB closeout sale, get 'em while they're hot, then pop one of those 250GB third-party drives into your enclosure and you'll be sitting pretty. Sure, the Arcade's still $70 cheaper, but you're getting the HDMI and component cables, a headset, and most importantly: the hard drive enclosure you'll need to do the deed.

Then ship that 20GB relic to a museum.

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