This is something that I wanted to know for a long time. After all the announcements and all the hard work MS does with its XboxLive service, how come they bottleneck everything with overpriced peripheral? Im thinking specifically about the HDD.

With the ability to download so much content from XboxLive, and now also with the very very cool feature of optional installing games to reduce loading times, why does MS hinder users with high prices on this peripheral? A quick search, I checked gamestop.com, they sell the 120GB HDD for 179 dollars. This is around 40% of the Elite pack, which is crazy. Another quick search, newegg.com has a 320GB HDD (for PC) for 79 dollars.

Why this huge difference? Ok, the MS HDD comes with preinstalled stuff if I recall correctly but I cannot believe that this adds the additional cost to the HDD. And if this is what adds costs, why not solve it via XboxLive? Like, buying a new HDD, you have to "format" it by yourself from the 360 and then via XboxLive, download and "install" the needed software that needs to be in there.

It would be very interesting to see the sales-data of the HDD for 360 and also very very interesting (but probably not so possible besides guestimates) what kinds of profit-margins MS has on these things. If the Elitepack with a 120GB can be sold for 449, is this still at a loss for MS? I reckon that it might be the HDD which MS decrease the cost on, in this package. Also, look at the Xbox360 Pro, around 299 dollars with 20Gb. Compare this with the 1709 dollar 120GB HDD and its totally crazy.

This pricing encourages users to different HDD-hacks and with MS trying to battle these kinds of hacks with XboxLive, in the end, you get an angry and dissatisfied customer, because they ask themselves why having to pay so much money for so "few" Gigabytes?

With the ever evolving XboxLive, with all the content you can download and the possibilities with the optional installations, it should be in MS best interest to lower the price of the HDD. This encourages users for more downloads (potential increase of micro-transactions) and more sales of this peripheral.

Its not only this peripheral that has a higher than expected price for 360, but this is such an important add-on, which really capitalizes on the things MS are doing great with, the online-service.

MS, 1 billion in revenue for XboxLive is nice, but it can be more, adjust the price of this peripheral. (And for next time, change HDD-partners because whoever is delivering these things are taking advantage of the situation. Or allow for thirdparty HDD to be used without hacks)

It would be interesting to hear comments and thoughts from all, especially from people in the biz.

cheers!