Analyst: Only HDD holding Xbox 360 back now

Written by Joe Martin

June 24, 2009 | 11:10

Tags: #pachter #terrabyte #wedbush-morgan #xbox-360

Companies: #microsoft

According to analysts the only thing that's holding the Xbox 360 back now is the lack of any real storage space, which is becoming more and more of a problem as Microsoft roll out more digital distribution services, such as the upcoming Games on Demand service that will launch in August.

Thankfully, a new terrabyte hard drive is rumoured to be in development for the Xbox 360 and will likely launch at the same time as Microsoft's new camera-based motion sensor, Project Natal.

The new Games on Demand service will let users download full Xbox 360 games to their hard drives and pay for them straight from a credit card, without MS Points. Discussing how this system might affect retailers, Wedbush Morgan's Michael Pachter suggested that retail stores might be forced to adapt to the market whether they like it or not - with the GameStop chain for one being firmly in the 'not' category. In comments yesterday GameStop said they did not believe that digital distribution would have a proper, sustainable market for a few years yet.

"While retailers may baulk at the possibility of day-and-date downloads, I don't see too many refusing to carry Microsoft product in retaliation," Pachter said in an interview with "Should a retailer boycott Microsoft, I think that the full force of the publishers would be brought to bear on that retailer, and they would find themselves starved for product."

"Many publishers favour such a model. It's true that retail partners wouldn't like it, but it is not necessarily true that they would have much to say about it," Pachter continued.

Would you prefer to buy your console games in a wholly digital format, or would you expect a price reduction if you were foregoing the physical benefits? Let us know your thoughts in the forums.
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