Pricing for the next generation Xbox 360 has been set, reports CNET. The core (cheap) console will sell for $300, with the premium model coming in at a whopping $400. They will be backward compatible and play old Xbox games, but new games will be priced from $49 to $59. Microsoft isn't putting a hard drive in the core system, so they anticipate selling more of the premium model, which I think is a mistake.

For $100 more, gamers can upgrade to the premium edition. That package will feature, in addition to the standard equipment, a headset, remote, membership to the Xbox Live entertainment and chat network, and a 20GB hard drive for storing games, music, and other content downloaded from Xbox Live. It will also swap out the wired controller for a wireless one.

The premium edition will be known as the Xbox 360 and will have a cream-colored shell, while the lower-priced version will be called the Xbox 360 core system and will come in a light green box, said David Reed, director of platform marketing for Xbox.

He predicted that many players who will buy the Xbox 360 this holiday season are likely to opt for the premium version. "There's no question we're going to sell a lot more Xbox 360 this holiday than we are of the Xbox 360 core system," Reed said.

It's not surprising that the Marketing Director would be optimistic, but he's deluding himself if he honestly believes that. Four hundred dollars for a console game system just seems high to me. Especially when you can get a desktop computer for less than that.

What's more, holiday shopping is usually done by ignorant parents. You may have kids asking for the premium system and being disappointed on Christmas morning when they find out they got stuck with the cheaper crippled version.

I purchased an Xbox, which I hardly ever have time to play. But only after they dropped the price to $200.