Microsoft Prices Xbox 360, Splits Market

Finally, the debate over pricing and whether or not a hard drive will be included can come to a rest.

Microsoft announced today at the Games Convention in Leipzig that its next-generation console would launch later this year in two different packages.

No hard drive or wireless controller for poor people

The cheaper core version will sell for £209 ($299 in the US; €299 on the continent) and includes the console, a wired controller, a faceplate, a standard audio-video cable and Xbox Live Silver membership.

The more expensive and fully featured premium version will come in at £279 ($399 in the US; €399 on the continent) and includes the console, a wireless controller, a faceplate, a component HD audio-video cable, a headset, an Ethernet cable, Xbox Live Silver membership and, most importantly, a 20 GB hard drive.

The premium version of the console, which for a limited time will come with a universal remote control, will also have "signature metallic detailing", according to Microsoft, to distinguish it from the core version.

Core system owners won't be able to get on Xbox
Live without buying a memory card or a hard drive

The exclusion of the hard drive in the core package backs up earlier reports that claimed Microsoft had warned developers against taking for granted that the hard drive would be present in all Xbox 360s.

This is a significant shift for Microsoft, which had only one hardware version of the Xbox that included a hard drive and gave developers a standard platform to make games for.

Microsoft also risks running afoul of less-informed buyers upgrading from the Xbox. The core version of the Xbox 360 lacks a lot of functionality Xbox owners have become used to, such as being able to save games without a memory card and being able to rip music for custom soundtracks. The core system will also not be able to play Xbox games, which need the hard drive for backwards compatibility.

No backwards compatibility for core system owners
without, you guessed it, a hard drive

The other exclusions from the core package suggest that Microsoft is aiming to keep the cost of getting into the next generation down.

The announcement today contradicts recent comments by Xbox boss Robbie Bach, who told Kikizo at the Electronic Entertainment Expo in May that, while the company was still considering its options, Microsoft was planning to release only one Xbox 360 package.

Sony, Microsoft's main hardware rival, has been vocal over the past months that the PlayStation 3 will be expensive when it hits stores, with company president Ken Kutaragi comically suggesting that he hoped people would see the value of the console and would work harder to afford it.

How much of an effect did Ken Kutaragi's recent PS3
comments have on Microsoft's decision?

Sony's brashness about the PlayStation 3's price likely played a part in Microsoft's pricing decision for Xbox 360.

But those without the means to pick up the premium version at launch will not be left out in the cold. Microsoft will have a raft of accessories available that will allow buyers of the core version to boost their Xbox 360s to get the exact same functionality as the premium version.

Below is a list of all the accessories that will be available to those that want to upgrade their Xbox 360 experience:

• Hard drive (20 GB) - £69.99
• Memory unit (64 MB) - £22.99
• Removable faceplate - £14.99
• Wireless controller - £32.99
• Wired controller - £24.99
• Wireless controller charge kit - £14.99
• Wireless controller rechargeable battery pack - £9.99
• Wireless networking adapter - £59.99
• Headset - £14.99
• Universal media remote - £19.99
• Component HD AV cable - £19.99
• SCART AV cable - £17.99
• VGA HD AV cable - £19.99

Alex Wollenschlaeger
Editor, Kikizo Games