TeamXbox: Of the two SKUs, the hard drive have proven the most controversial difference between the Premium and Core editions. What happened to all the things we heard Microsoft stress about Xbox’s built-in hard drive and its vital role to the games we’ve been playing for the past 4 years?
Scott Henson: Our goal with Xbox 360 was to enable as many of these scenarios if you had a memory unit or if you had a hard drive and to make this transparent to our developers so they did not have to think about where things were being stored. This includes the ability to store things in other locations in the future as well like somewhere in your home network.
To address load times which are enhanced by caching information to the hard drive, we’ve invested in a super fast DVD that is more than two times faster than the first Xbox (Xbox was 5X andXbox 360 is 12X). It’s also important to note that in the beginning we sat down with game developers and proposed the choice between 512 and a hard drive, and without question developers said very clearly that RAM was much more important than a hard drive. It makes the biggest impact and fulfills the vision of their games. More RAM provides significantly more opportunity for developers to innovate in manners that require extremely fast access time which only RAM can provide.

Just about everything falls into this category – world size, complexity of geometry, audio effects, AI maps and behavior patterns, collisions maps and most noticeably animation data. (Actual quote from one of our developers: "I would trade a HD for RAM in a second if ever asked again – It’s a no brainer.")

TeamXbox: Long before last month's announcement, there were rumors that Microsoft decided to raise the price of the Xbox 360 at the last minute and create these two SKUs after Kutaragi confirmed that the PlayStation 3 will be an expensive console and also that it won’t come with a hard drive. What would you say to that?
Scott Henson: We have our own game plan independent of competitive rhetoric. Our pricing was determined well in advance of competitive comments and was made with the customer first and foremost in mind. When setting our MSRP, we looked at the impact that it would have on our own internal production costs and most importantly, the impact it would have on the bottom line of the consumer.