The Xbox team has spent a lot of time chatting about the iPod. They even went so far as to design the physical look of the Xbox 360 to look like an iPod. (White case with chrome accents, large circle in the middle).
This month's Game Informer Magazine said:
Game Informer: Will the Xbox 360 be sold in different models, one with a hard drive and one without? What about different sized hard drive?
Allard: It's something we're not ready to announce yet. We've been getting good feedback from people at E3 and a lot of retailers. Look at the succes the Ipod has had with different offerings. That is something we have looked at, sort of on the long term horizon. We want to go get everybody out there that likes to play, and make them an Xbox customer.
The Chat Transcript said:
J Allard (Expert):
Q: will the core system come with a memory card? if not, how can u save games?
A: i think it is really important to emphasize especially for the folks in this chat room that we did not design the core system around you guys. similar to the shuffle, the boxter, the 4:3 tv, the 1mpix camera, we designed the core system as a way to get folks to come into the family at a cheaper prices and decide if an how they scale the system.
So the Xbox 360 Xbox Core is Microsoft's attempt at replicating the iPod Shuffle. I think MS got a few things wrong in trying to copy Apple's business model...
Imagine if Apple had released the iPod Shuffle on the same day as the original iPod except the Shuffle was the same exact size as the iPod and only $100 less. Now imagine if because of the Shuffle's limited memory storage space Apple told all of the artists that their iTunes songs would have to be restricted to a max bitrate of 96kbps. All the songs on iTunes would be lower quality and sound inferior to competing music download services, potentially hurting the future of both iTunes and iPod. This is essentially what MS has done to Xbox 360 and it's games.
If MS wanted to replicate the success of iPod and iPod shuffle with Xbox 360 and 360 core, then they should have waited some time before releasing the core and they should not have limited the potential of their games to accomodate the core. The main reasons why someone would buy an iPod shuffle are its significantly smaller size and low price advantage over the iPod. The Xbox 360 core should have come out at a time when MS could give people a smaller redesigned Xbox 360 possibly with some bells and whistles like wi-fi at a very low cost. Like the shuffle, the core system should have had a sizeable portion of flash memory built into it thereby allowing game developers to make full use of the Xbox 360's HDD without having to worry about supporting a system without memory.
Apple could have easily launched a flash player at the same time that the iPod first came out, but this move would have diluted the quality of the iPod name before it could become a phenomenon. Instead Apple waited until a time where they could offer a smaller audio device at a signficantly cheaper price. Timing is important! The reasons for MS to wait are simple, it gives them the opportunity to associate a high quality standard with the Xbox 360 brand and it also gives them time to eventually offer a low cost system in the $100-$150 range which is truly attractive to the low end consumer. The low end consumer is not going to be interested in an expensive $300 device that offers no practical use, size, or design advantages over the Xbox 360.
The main mistakes MS made in trying to copy Apple iPod Shuffle are:
1.) The core is not signficantly cheaper than Xbox 360 keeping it out of reach of the low budget consumer.
2.) The core's hardware offers no unique or desireable advantages over Xbox 360 (ie. smaller size, wi-fi, unique design)
3.) The core's memory limitations should not have been allowed to lower the potential quality of all Xbox 360 games.
4.) The core should not have been launched simultatneously with the Xbox 360 because it dilutes the level of quality associated with the brand.
Unlike the 360 Core, the iPod Shuffle offered users unique design advantages and an inexpensive pricepoint without affecting the quality of the content created for it.