Why Do Xbox 360 Hard Drives Cost So Much?

Ever wonder why the Xbox 360 replacement hard drives costs so much? There’s no doubt you have if you’ve ever picked one up, since the 20GB model retails for around $90, while the 120GB is twice that. Well, would you believe that it’s because they cost that much to make? Nah, didn’t think so.

As it turns out, companies like to make money, and where they know the consumer is trapped, they jack the price high, since they know it will sell. Patrick Klepek from MTV contacted iSuppli, the company that tears into the pricing of gadgets, to see what the scoop was. As it turns out, the entire hard drive and package costs around $100 to Microsoft, but most of it is due to the retail packaging, drive enclosure and pre-bundled software (which, as far as I know, is free straight from Xbox Live).

Profit to Microsoft on their $180 drive is around $80… not bad for doing virtually nothing. The sad thing is that mobile drives, like the one used for the Xbox are cheap, so of the $100 that Microsoft pays for the drive and enclosure, less than half is likely for the drive itself. It also hurts to check out sites like NewEgg, who sell 320GB mobile drives for much less than what Microsoft charges for the Xbox 120GB drive.

iSuppli representative Krishna Chander expects the hard drive came from electronics manufacturers Toshiba or Seagate . When the hard drive ships to retail, it comes pre-loaded with starter software (i.e. Xbox Live Arcade trials) and “specific Gaming Instructions and some levels of the OS,” said Chander.

Source: MTV Multiplayer