One of those highly paid analyst types from Wedbush has gone on record saying that the only thing holding back a true-to-life Xbox 360 game download service, à la Steam, is hard drive capacity. Right now, you can buy a 120GB hard drive for $140 on Amazon, which is ridiculous given the low, low prices of standard hard drives these days. (A recent CrunchDeal spotted a 1TB hard drive for $77.) So if Microsoft is serious about launching such a service, it needs to do something about bringing large capacity hard drives at normal prices. There’s no reason that a 120GB hard disk drive should cost $140 in the year 2009.
Similarly, that same analyst, a Mr. Michael Pachter, said that retailers had better get used to the idea of a day-and-date download service. Generally speaking, publishers don’t give a damn which way games are sold so long as they get their cut of the action. (They’ll also bitch about piracy, but that won’t be nearly as big a problem on the Xbox 360 as it is on the PC.) Retailers may not like getting squeezed out, especially if the downloadable version is cheaper than the retail copy (and why wouldn’t it be?), but that’s not our problem.
UPDATE Whoops, compared the wrong type of drive. The Xbox 360 uses a 2.5-inch drive, not a 3.5-inch drive. A quick search on Newegg pulls up a 500GB 2.5-inch drive for $90. It’s only 5400RPM, but the point remains: the price of the Xbox 360 HDD really ought to be lowered if Microsoft wants the download service to be any type of success.