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Microsoft announced a new, high-end model of its Xbox 360 video game console yesterday, which will hit stores in N. America on Apr. 29, priced at $479.99. It is particularly emphasizing the Elite's 120GB hard drive both for playing games and watching movies. The drive will also be sold separately for $179.99, for those who already own an Xbox 360 but want more storage. Microsoft-MSFT-chart-03-27-07 Other new features include an HDMI port and cable and a premium black finish. Peter Moore, VP of Microsoft's Interactive Entertainment Business, commented, "Xbox 360 Elite’s larger hard drive and premium accessories will allow our community to enjoy all that the next generation of entertainment has to offer." Kotaku.com, a popular video game news site, says a Sony senior marketing executive said Microsoft is playing catch up to the PlayStation 3, which already offers a future-proof experience among all of its models. The Elite is $20 cheaper than Sony's cheapest PS3 offering, and $80 more than the Xbox 360 Pro (20GB HD). The Financial Times reports Microsoft's decision not to include an HD-DVD drive with the Elite, is a blow to Toshiba, which is battling Sony's Blu-ray standard. Wedbush Morgan analyst Michael Pachter says he thinks, "If nothing else, this is an acknowledgement that Blu-ray is going to win [the standards war]." Microsoft's shares lost 1.8% to $27.72 yesterday and were unchanged in after-hours activity on volume of more than two million.

Sources: Press release [I, II], Kotaku.com, CNET, The New York Times, The Wall Street Journal, Financial Times
Commentary: Microsoft vs. Sony vs. Nintendo: Demand Doesn’t LieNintendo Wii Wins Console Sales Battle in FebruaryGame Consoles: Microsoft's Search for the Killer App
Stocks/ETFs to watch: Microsoft (NASDAQ:MSFT), Toshiba (OTCPK:TOSBF). Competitors: Nintendo (OTCPK:NTDOY), Sony (NYSE:SNE). Gaming software publishers: Electronic Arts (ERTS), Activision (NASDAQ:ATVI), Konami (NYSE:KNM), Take Two (NASDAQ:TTWO), THQ (THQI). ETFs: Software HOLDRs (NYSE:SWH), iShares Goldman Sachs Software Index (NYSEARCA:IGV), Technology Select Sector SPDR (NYSEARCA:XLK)
Related: Video interview about the Xbox 360 Elite with Albert Penello of Microsoft; Xbox.com

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Source: Microsoft to Offer 'Elite' Version of Xbox 360