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The latestet iteration of Microsoft's (Nasdaq: MSFT) next-generation gaming console, the Xbox 360 Elite, hit store shelves Sunday. The new model boasts a 120 GB hard drive, a high-definition multimedia interface (HDMI) port for connecting to HDTV, a wireless controller and a premium black finish on the console's exterior
"Today's games and entertainment enthusiast has an insatiable appetite for digital high-definition content," said Peter Moore, corporate vice president for the Interactive Entertainment Business at Microsoft said as the Elite edition was unveiled last month. "Xbox 360 Elite's larger hard drive and premium accessories will allow our community to enjoy all that the next generation of entertainment has to offer."
With a 12-month head start on competitors Nintendo and Sony (NYSE: SNE), the Xbox 360 boasts the most total sales 
, with some 10 million units sold around the world. The new Elite version fulfills gamers' desire for a hardier hard drive and moves another step in Microsoft's quest make the console an entertainment and media device for the living room.
In the Box
Buyers will pay an US$80 premium over the next-most expensive edition of the Xbox 360 -- which lists for $499. Buyers of the Xbox 360 Elite will receive a console with a premium black finish and three core processors capable of emitting a 1080p high-definition (HD) signal, 16:9 cinematic aspect ratio, antialiasing for smooth textures, full surround sound, HDMI output and DVD playback.
The Elite's 120 GB hard drive offers roughly six times the storage of the standard and premium Xbox 360 models and is twice the size of the PlayStation 3. The larger hard drive will allow gamers to save their games and store television shows, movies, music, pictures, trailers, levels, demos and other content from the Xbox Live Marketplace, Microsoft said.
The new model also includes a wireless controller, also black, with a range of up to 30 feet. The controller features the Xbox "Guide Button" for quick in-game access to friends and music. There is also a black headset that lets gamers send voice messages to friends, an HDMI cable for HD Video, and an Xbox Live Silver membership with a one-month subscription to Xbox Live Gold.
The Elite does not match Sony's PlayStation 3 feature-for-feature, as the Microsoft offering does not have WiFi capabilities (it's Ethernet-only) or an HD DVD player. Existing Xbox 360 owners can spruce up their system with the accessory version of the expanded hard drive for $180.
"It's not a total revamping," Brian O'Rourke, a principle analyst at InStat, told TechNewsWorld. "It's more of a refreshing with essentially more storage and a higher resolution connector."
Another Living Room Box?
"The Elite serves a perceived need for more storage and for HDMI. I say 'perceived' because, as a practical matter, most consumers will never fill the standard 20 GB hard drive, nor will most need an HDMI interface," Michael Pachter, an analyst at Wedbush Morgan, told TechNewsWorld.
Pachter refers to it as "a perceived need" because, as a practical matter, most consumers will never fill the standard 20 GB hard drive, nor will most need an HDMI interface. Twenty GB of storage, he explained, is sufficient for most demo downloads, provided that the consumer cleans up the hard drive every 30 downloads.
It is a similar case for the HDMI interface. A DVI interface is fine for all 720p displays and will be fine for a 1080p for at least three more years, if not forever, Pacther continued.
"It's one of those things that is nice to have, and the HDMI cable has less interference than a DVI cable, but not enough for most consumers to even see," he noted.
"The console is quite similar to the $599 PS3, without a WiFi Internet connection and without Blu-ray. Again, those features are not necessary for most consumers, but are nice to have for another $120. The Elite has a bigger hard drive than the PS3, but the excess is overkill. To paraphrase from another context, size doesn't really matter," he added.
Microsoft, Pachter predicted, has plans to turn the Elite into a digital video recorder (DVR), and to offer other media content through Xbox Live. If the company offers movie and television downloads, the extra storage will matter a lot. "They have yet to market the device this way, so it's impossible to know."
However, InStat's O'Rourke has long believed that both Microsoft and Sony would like to see their gaming consoles become the newest residents of consumers' media and entertainment centers. "That's where most video game consoles would like to be," he explained "and this, they think, will further cement their place [in the living room]. With more advanced features and storage, they are hoping that Xbox 360 users will download movies, download video that is available on the Xbox Live Marketplace."
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