Dueling consumer electronics strategies: XBox 360 versus the video iPod

It's interesting to compare Microsoft's XBox 360 "Sold Out" marketing campaign with Apple's introduction of the Video iPod. After all, the two products retail in the US for the same prices (XBox $299 and $399, video iPod $299 and $399), and both are expected to be hot products this holiday season. Yet Microsoft sell's its product at a loss, won't be able to produce enough to meet demand, and bundles it with content (not all of which it distributes and directly profits from) to make up for the lack of profit on the core product. Apple on the other hand makes nearly 50% gross margin on the product, appears to have plenty of supply, despite demand for millions of units a month, and doesn't require bundles to drive up ticket prices, and in fact makes additional profit on downloaded content for the device. Want to take bets on which will be the better business long term?

Technorati Tags: Microsoft, Apple, Video iPod, Games, Gaming, XBox 360, Marketing