I just don’t get what Microsoft is trying to do with the Xbox 360 Elite. Sure, it has a bigger hard drive, and HDMI, and it’s black; but what does it really deliver to warrant an $80 premium over the, well, Premium pack?

HDMI

First, I want to make mention of the HDMI capabilities. It’s been confirmed by Microsoft it only supports HDMI 1.2. The PS3 supports HDMI 1.3, so the argument will continue between the two camps into, “who’s HDMI is better,” and right now it’s obvious that it’s Sony’s. What does this mean to the layman? Here’s a direct quote from Microsoft’s HD-DVD evangelist Amir Majidimehr:

Xbox 360 Elite supports HDMI 1.2 profile. For audio, you can select DD, DTS (at 1.5 Mbps), and WMA-Pro (Microsoft high fidelity multi-channel codec supported in some AVRs such as Pioneer). Since it is not based on 1.3, it will not support output of DD+ or TrueHD (even if it did, mixing would have been turned off).

And then there’s the honest answer – this probably won’t effect 99% of current and potential console owners in the next two to three years. Most people do not have the audio components necessary to support TrueHD, DD+ or any 5.1 PCM (uncompressed) audio streams.

It is also important to mention HDMI is a negligible improvement in video quality over component and VGA. For most consumers it offers the convenience of audio and video over a single cable. Now here’s where I think this point isn’t as important as we are lead to believe. Most people don’t have HDMI-ready receivers, so it’s likely people are running two cables anyway – one HDMI to the television, and an optical cable to a receiver for audio. If one was to truly use HDMI as a single-cable solution, they would be getting a two-channel audio experience in simulated surround sound, and then advanced audio codes wouldn’t mean anything to them anyway.

120GB Hard Drive

The current 20GB hard drive retails for $100, while the 120GB hard drive will go for $180. So, if one were to compare the two prices they could pinpoint the reason for the $80 price hike over the current Xbox 360 SKU. Consumers thought the hard drive was overpriced before, and now it’s in the realm of ridiculous. 20GB and 60GB models aside, the PS3 will never have a problem meeting consumer’s demand for storage space because Sony allows them to replace the hard drive with off-the-shelf PC parts. A quick search online finds most 2.5 inch notebook drives go for about $1 per gigabyte, so the premium for the larger drive capacity is the equivalent of flushing $80 down the toilet.

What Else Do I Get?

Simply, no smaller, cooler CPUs; no integrated wireless, and no built-in HD-DVD drive. The cooler chips are coming, but not in the Elites, so that tells me these will probably see the same failure rate as with the current hardware. And integrated wireless means nothing to me, because I need specialized wireless equipment to handle the range between my device and router, but it might be important to some.

But Microsoft’s decision to not include HD-DVD with the Elite is the biggest mistake they could make. Look at the comparison between the 20GB PS3 and Xbox 360 Elite:

20GB PS3
- 20 GB HDD (upgradeable)
- HDMI 1.3
- Blu-ray Player
- No Integrated WiFi
- Wireless Bluetooth Controller
- Free Online Multiplayer/PS3 Network
- $499

Xbox 360 Elite
- 120GB Hard Drive (not upgradeable)
- HDMI 1.2
- DVD Drive, no integrated HD-DVD
- No Integrated WiFi
- Wireless Controller
- Xbox Live $60 for One-Year Subscription
- $479

If Microsoft would have included HD-DVD with the Elite, and they could have charged up to $499 for the package, the comparison to the PS3 would have been more favorable, not forgetting giving HD-DVD a nice bump in consumer base. But looking at the breakdown above, the only specification worth mentioning above the PS3 is the larger hard drive, which is overpriced to begin with. Looking at the two, I’d say the PS3 is the better deal. And that’s a strange thing to hear, since Sony has really taken a beating over the PS3 pricing during the past year.

The other point worth mentioning is the comparison between the Playstation Network and Xbox Live. When Sony was trumpeting their free online service for multiplayer gaming, Microsoft said, “hey look, you can buy our console and a year of Xbox Live, and it would still be cheaper than a PS3.” Now that argument is null and void, thanks to Microsoft’s pricing.

The Verdict

The Xbox 360 doesn’t need a third SKU. It should have introduced the Elite at $400, and dropped the Premium bundle to replace the Core. Overpriced and under”tech”ed, it isn’t for new or existing consumers. The best value for them is, ironically, the PS3.