Backstage: The next iPod competitor is… Xbox 360?

Once in a rare while, we use Backstage to talk about interesting rumors that are circulating in the industry, and today’s going to be one of those occasions. For the news purists out there, we’ll say up front: none of this is confirmed, and it may all just be idle gossip, so we’ll have to see for ourselves.

We’ve been hearing for months that Microsoft’s new game console (once known as Xenon, now dubbed Xbox 360) was going to come in two or more flavors, and that at least one of them is going to include a hard disk for storage. Last we heard, Microsoft was planning to manufacture around 80% of their machines with the hard disk, and 20% without. The 20% will be sold for the plausible price of $299, while the other 80% will sell for the “uh oh, that reminds me of Sega’s Saturn” price of $399. If your local store just happens to be sold out of the $299 model you saw in the newspaper, you can always buy the $399 one. In our book, that would be bait-and-switch, only taken to a new height.

But… what if the $399 model came with something you might actually not mind having? Like, a portable hard disk (or flash drive) that’s also a portable digital music player? Made by a company that’s increasingly desperate to get people interested in its mostly ignored MSN Music store. And the drive would also be sold separately, for say, $100-150, quite possibly in various capacities and at different price points.

And what if you sidestepped the media by debuting the whole digital music player thing on a worldwide MTV presentation on May 12 and 13? And convinced MTV to “provide ongoing in-depth coverage of the next-generation Xbox highlighting the latest news, product details and previews of hot next-generation games”? That would be pretty sneaky, and a good way to manuever your way around jaded video game journalists who aren’t as excited about the Xbox 360 as Microsoft is.

Again, this is a rumor. But it makes a lot of sense – unlike that picture above, which is supposed to be the Xbox 360’s new logo, and amply demonstrates the fallacy of using focus groups to make important decisions.

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