120GB HDD pricing analyzed and it's overpriced

Ps3 pwns the xbox in that respect.... damn Micro$oft

Detective word?

You were right. This really doesn't come as any surprise. Then again, Microsoft is a business and is looking to make a profit, so although I hate the price, and still have yet to purchase the drive myself, I have to say kudos to them with their business plan. They are making money.

orly? is this new news? I thought everyone thought it was over priced when it came out...... You can buy a 750GB HDD for cheaper at Newegg or TigerDirect. M$ Pushing it to the limit (over it)..

I can't believe they are still getting away with that... but then again, I have one. :(

Microsoft trying recoup losses on its hardware failures. Does anyone really need a 120GB drive? I keep most my TV shows and arcade games on live anyway and download them when want to play them, or just buy an extra 20GB drive on Ebay $20. thats what I did and I still haven't used it.

I don't believe it cost more than 50 bucks to make.
MS's got negotiation power.

I could defnitely use and afford one, but the price is so high that I haven't bought one in protest. I think it's a total rip-off.

Why is M$ tacking on an $80 profit for their retailers? That is what I would like to know. Do retailers get that high of a return on all of the 360 accessories? I for one would like to buy one of these because my 360 but I cannot justify this amount.

Ive always wondered why they did this. If they make the drives cheaper (maybe even free with X # of points purchased) then more people would download stuff from XBL, I know I would! Pretty bad oversight on MS part if you ask me. If I could get a free drive for buying $50 worth of XBL points, I would jump at that deal.

I don't think they want to sell any of them because of all the headaches they would have dealing with support.

I have 84 mb left on my 20 gig HDD.

its pretty sad. I need to buy the bigger hard drive I guess? :(

It should be cheaper. That thing is almost as much as a Wii!!

Ok time to play Basic Economics!

If the HDD costs $80 to produce... and no reason to think they don't, then we start to get into the profits... Watch the bouncing ball.

MS takes $20 profit on their $80 investment.
The distributor then takes a profit off of the item, and sells to the Retailer, probably about $120 or so.
The retailer then marks it up 40-60% and sell it.

To put it another way, MS sell to the Distributor, normally for 60% of MSRP, but because of their stated $20 Profit from each unit, that means they are selling to the Distributors for closer to 48% of MSRP.

Distributors normally sell to Retailers at 40-50% of MSRP, so the retailers can make money on the product, but in the case of this drive it's more then likely 25-35% of MSRP.

The average Retailer needs to make 40% on anything out on their floor to make money.

By the basic laws of Profitability and Retail sales, the 120gig HDD is Under Priced. May be more then the consumer is willing to pay, but with the Starting manufacturing cost of $80 the numbers all make some sense.


Think of it this way, that HDD you buy for your PS3 that costs $80 from New Egg (Who take a hit on the retailer percentages to begin with) Probably cost $20 to manufacture.

And despite the strength of the Canadian dollar, this thing costs $209 up here! WTF Microsoft.

I upgraded my 40GB PS3 to 150GB for £40 (about $20). This is why I made sure I purchased a 360 Elite. The HDD price is rediculous to the point that they are taking the piss.

Amazon.com has them for $149.99 and free shipping. Still over priced, but those of you that need to get one can at least save a bit. My "buddy" kicked my console over on a tile floor and trashed my old 20 gig. Gave me an excuse to upgrade, although it could have been better circumstances.

Sony's done it as well with their own brand HDMI cable, Memory sticks for PSP and so on. Only difference being... You can actually buy third party stuff which is 100% cheaper (if you smart enough). Though with Microsoft and 360, you can't. Thats not totally a bad thing. There is increased security by not having it totally open.

We've known for a while that the drive is over priced. I mean compare it with just about any drive on the net and you'd realise you could buy one yourself cheaper but because it won't work on the console your stuck buying the MS ones (if you choose too).

Honestly i think Microsoft should cut the prices on these hard drives a lot. Sure its good business for them selling them at high prices but do you know whats also good? Getting more hard drives (bigger) in the hands of people who will then be more likely to buy DLC/GAMES/Movies off of the market place. Think of it as an investment.

That and the Core/Arcade needs a hard drive added to it so that future games can take advantage of it.

The bottom line is that with the ps3 console, I could pay as much as $80 (if I didn't try very hard to find it cheaper) to get a retail 2.5", 120gb sata drive. This is $100 cheaper than the xbox 360 upgrade. This price difference is simply insane, and wipes out any and every price advantage that the 360 has over the ps3.

And this is news how? We knew this when the damn thing came out.

And this is news how? We knew this when the damn thing came out.

all i know is the Xbox is the most expensive system out right now to get the same quality as the PS3

If you want HD Movies, Wi-Fi, Rechargable Controllers, Any theme really, Online Play, etc.

All that comes to way more than what the PS3 offers.

I'm sorry to say, the Xbox is the OverPriced system, but if you don't need what the PS3 has, then it's a greatly prices system.

So, everyone, I win this battle.

Stop equating cost with value.

I have a PS3 but do every much like the 360, I may later swap my PS3 for a 360 or buy it when I get extra money.

Anyways, its surprising that Sony would let you easily upgrade the HDD yet Microsoft keeps it proprietary.

Shouldn't there be a way to remove the casing on the 360 HDD, slap in your own 2.5" HDD and put it back together?

I swear I saw a guide on how to do this.......

In other news, the sky is blue.

Everyone should know how the game is played by now. They take losses on the actual hardware, but there is major money to be made in accessories, licensing and peripheral add-ons. It's been like this from day one, nothing has changed in that respect.

Ya it might be overpriced, but is it overpriced compared to the $99 20GB HD? An extra 100 GB for $80 is reasonable to me looking at what the 20GB costs...

As others have said, You and I can buy a 120GB drive for $70, right now on Newegg. That's not even shopping around.

Microsoft will be buying these in bulk, probably directly from a solid partner like Toshiba. This means that they bypass whatever markup Newegg is making and get a price break for volume.

The casing materials, at the scale they are produced (Mostly interchangeable with the regular HDs, I'd imagine) cost probably on the order of a dollar a piece. Maybe. Another dollar (rounded up!) for the retail packaging.

Freight is handled in a super efficient manner, too. Microsoft generally will ship these to a few distribution centers and wholesalers who handle it from there. Major chains pay very little (Even with rising gas prices) because they buy in bulk, break down the quantities to what a store needs, and ship that using their own trucks or a contractor.

I'm thinking that $50 is a solid guess as to how much this thing costs to make. Lets be super-duper pessimistic and say that the cost of Freight to get it into your local Circuit City costs another dollar a unit.

What's left? Markup, baby. The lions' share of that will be taken by the retailer, but Microsoft will gouge on it since this is an accessory product.

Then you've got the other spreadsheet-monkey costs, the cost for retail space, the employee stocking it, the employee ringing it up, etc. And then there is marketing, but this product has zero specific marketing. The 360 line marketing is all it needs. So lets be pessimistic and say that it costs a whopping $60 all told.

How much is it retailing for again?