I do not doubt for a second that the 360 is going to be a power house. But what is it ‘really’? Are they rolling out a video game system, or are they trying to do some ‘all-in-one’ system that is going to cost MS a small fortune to produce?

Noah here, just back from the gala Xbox 360 cocktail party in NYC where hoardes of journos got hands-on time with scads of games. I’m definitely not tired of looking at this white-hot box. And I’m beginning to see the wisdom of selling two SKUs come November 22. The stripped down version, which comes with the wired controller and without a hard drive, is a nice gateway console for timid gamers. The ability to jack an iPod into the 360, as well as download photos from a digital camera, gives non-gamers a great excuse to play Project Gotham Racing 3 when no one is looking. (None of the games on the floor this evening required the hard drive, by the way.) Once folks are sold on the less expensive version of the 360, Microsoft will make a killing upselling them the wireless controller, headset, 20GB hard drive and camera when it eventually comes out. Lots of 360 buyers will make less of an investment up front, but wind up spending more money over the long haul. Smart Microsoft. [Read the rest]