Did the Elite hurt Microsoft?
Microsoft is really experimenting with their game console this time
around. They broke the mold by offering two units at launch and then
launch a third version over a year after launch. The Xbox 360 Elite
included an HDMI port, larger hard drive and is black. This unit does
not come with any significant changes to the internals of the Xbox
360. So the real question becomes was Microsoft's decision to release
the Elite good for the console or a mistake.
From the beginning of the 360's life gamers have had two major complaints about their 360: the hard drive is too small and why no HDMI port? As more and more content became available for download from Xbox Live Marketplace it was clear that the original 20 gig hard drive was just too small. You often had to do some house cleaning in order to download new content or re-download items you deleted to make room for something else. A new larger hard drive made sense for the 360 since it's so easy to attach and detach.
Since the PS3 offered true 1080p support over HDMI it was clear that Sony would hold this over the Xbox 360 until Microsoft did something about it. Adding HDMI to the 360 removed this bullet point from Sony's PR and showed everyone that HDMI makes no difference to component cables for playing games.
When Microsoft chose to introduce these new features to the 360 it made it clear that they were listening to their community of fans. These where changes the fans wanted to see in the Xbox 360 and further showed why the Xbox 360 was a better gaming system than the PS3. The problem comes in how they chose to introduce those changes. Since Microsoft had flooded the market with 360 before the holiday season there where several 360s already in the channel. If Microsoft announced they where adding HDMI to the Core and Pro models no one would buy the version that already was in retail stores across the world. Everyone would just wait for the new models and Microsoft would most likely have to take back the non-HDMI version. So the decision was made to create a new console with HDMI and a larger hard drive.
The Elite was born out of the need to introduce HDMI without replacing existing units in retail. Microsoft claims that the Elite was an smart choice for new consumers so they could buy a console with all the perks of the Pro but with HDMI and a 120 GB hard drive. So for those consumers that really wanted that chrome DVD drive cover the Elite solved their dilemma of having to buy a Core 360 plus the new hard drive. Since the Core plus the 120 GB HD is the same price this saves the consumer from having to buy a Core. Seem a little silly? Introduce a new model so your new customer can just buy one item instead of two?
Before the Elite was formally announced the Xbox 360 was selling at a sole rate of 65K units a week in North America. This all changed the wee that the Xbox 360 Elite was announced. Upon the news that a new version of the 360 would be coming out in a month the 360 sales dropped by 1/3 down to 40K units a week. This sales drop lasted for five weeks and did not improve until the Elite was available at retail. After the Elite was released the Xbox 360 sales have improved but not to the point they once where. The console now is averaging 60K units per week. These numbers are only North America but one would think the announcement of the Xbox 360 Elite has affected sales in Europe and Asia as well. Since it is not known when the Elite will be launched in those regions one can only wonder if fans there are holding out for the new version or if they have just accepted the Elite is not worth waiting for. Either way it is clear that the Elite have only hurt sales of Microsoft's console.
By introducing the Xbox 360 Elite Microsoft has shown they are responsive to the community but at the same time they have only hindered their consoles success by adding confusion. If Microsoft would have just released black accessories and a harder hard drive they would have gained community goodwill and justified the reason for making a Core 360. They could have educated retailers to push the sale of the Core with the new hard drive but instead they add a new console. Hopefully Microsoft will learn from their mistakes and make adjustments to their pricing in an effort to make of for the sales lost because of the launch of the Elite.
From the beginning of the 360's life gamers have had two major complaints about their 360: the hard drive is too small and why no HDMI port? As more and more content became available for download from Xbox Live Marketplace it was clear that the original 20 gig hard drive was just too small. You often had to do some house cleaning in order to download new content or re-download items you deleted to make room for something else. A new larger hard drive made sense for the 360 since it's so easy to attach and detach.
Since the PS3 offered true 1080p support over HDMI it was clear that Sony would hold this over the Xbox 360 until Microsoft did something about it. Adding HDMI to the 360 removed this bullet point from Sony's PR and showed everyone that HDMI makes no difference to component cables for playing games.
When Microsoft chose to introduce these new features to the 360 it made it clear that they were listening to their community of fans. These where changes the fans wanted to see in the Xbox 360 and further showed why the Xbox 360 was a better gaming system than the PS3. The problem comes in how they chose to introduce those changes. Since Microsoft had flooded the market with 360 before the holiday season there where several 360s already in the channel. If Microsoft announced they where adding HDMI to the Core and Pro models no one would buy the version that already was in retail stores across the world. Everyone would just wait for the new models and Microsoft would most likely have to take back the non-HDMI version. So the decision was made to create a new console with HDMI and a larger hard drive.
The Elite was born out of the need to introduce HDMI without replacing existing units in retail. Microsoft claims that the Elite was an smart choice for new consumers so they could buy a console with all the perks of the Pro but with HDMI and a 120 GB hard drive. So for those consumers that really wanted that chrome DVD drive cover the Elite solved their dilemma of having to buy a Core 360 plus the new hard drive. Since the Core plus the 120 GB HD is the same price this saves the consumer from having to buy a Core. Seem a little silly? Introduce a new model so your new customer can just buy one item instead of two?
Before the Elite was formally announced the Xbox 360 was selling at a sole rate of 65K units a week in North America. This all changed the wee that the Xbox 360 Elite was announced. Upon the news that a new version of the 360 would be coming out in a month the 360 sales dropped by 1/3 down to 40K units a week. This sales drop lasted for five weeks and did not improve until the Elite was available at retail. After the Elite was released the Xbox 360 sales have improved but not to the point they once where. The console now is averaging 60K units per week. These numbers are only North America but one would think the announcement of the Xbox 360 Elite has affected sales in Europe and Asia as well. Since it is not known when the Elite will be launched in those regions one can only wonder if fans there are holding out for the new version or if they have just accepted the Elite is not worth waiting for. Either way it is clear that the Elite have only hurt sales of Microsoft's console.
By introducing the Xbox 360 Elite Microsoft has shown they are responsive to the community but at the same time they have only hindered their consoles success by adding confusion. If Microsoft would have just released black accessories and a harder hard drive they would have gained community goodwill and justified the reason for making a Core 360. They could have educated retailers to push the sale of the Core with the new hard drive but instead they add a new console. Hopefully Microsoft will learn from their mistakes and make adjustments to their pricing in an effort to make of for the sales lost because of the launch of the Elite.
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