Xbox 360 Elite in its black finish
Microsoft's newest Xbox 360 SKU, in my opinion

Microsoft is set to release its Xbox 360 Elite in a few weeks. The new Xbox 360 Elite SKU adds an HDMI output, upgrades the hard drive to 120GB and features a black finish. Retail pricing is set at $479, a little more than the Premium SKU and $30 less than the outgoing PlayStation 3 20GB SKU.

However, does the Xbox 360 Elite have much to offer to current Xbox 360 owners? Let us start out with the HDMI output capabilities. The Xbox 360 Elite is capable of outputting 1080p over HDMI. How Microsoft achieved this is questionable. A Microsoft representative posted details of the Elite’s HDMI output capabilities last week on AVS Forum.

The Elite follows the HDMI 1.2 standard, which is perfectly fine for video. However, the audio comes to question. Even with HDMI, the Elite is only able to pass-through Dolby Digital, DTS, and 2-channel PCM audio through HDMI. Although this is perfectly fine for games, what about users that want a gaming console and HD DVD player all in one?

As a backer of HD DVD, Microsoft should fully support HD DVD features, especially the ability to decode lossless audio and output it as uncompressed PCM like CE HD DVD players do. The PS3 is able to output multi-channel PCM over its HDMI port, why cannot the Elite?

When playing HD DVD’s, the Xbox 360 has to take the Dolby Digital Plus or TrueHD audio track and down mix it to Dolby Digital, and DTS with the spring update. Dolby Digital Plus has a bit rate of 6.144Mbit/s while TrueHD is a lossless format. Dolby Digital on the other hand has a bit rate of 640kbp/s and DTS has a bit rate of 1.5Mbp/s – that is a dramatic and noticeable difference.

Dolby Digital or DTS is then sent to a home theater receiver via optical S/PDIF. The HD DVD specification dictates that HD DVD players have to be able to decode Dolby Digital Plus and TrueHD audio formats, and the Xbox 360 is capable of it or it would not be able to down mix the audio track.

If the Elite SKU implements native HDMI output, in terms of audio and video, it should have no trouble decoding the Dolby Digital Plus or TrueHD audio tracks and passing it on as multi-channel PCM over HDMI. HDMI equipped Xbox 360’s will never be able to output a straight TrueHD signal over HDMI because HDMI 1.3 is required for that.

This is where I start speculating and question Microsoft’s HDMI implementation. The Xbox 360 Elite should have no troubles decoding Dolby Digital Plus or TrueHD audio tracks and outputting it as multi-channel PCM, because the Xbox 360 is capable of decoding the audio formats, as per HD DVD specification and the codec has to be present for the Dolby Digital encoder to recognize the audio stream and down mix.

Judging by the output capabilities of the Elite, it is my opinion that Microsoft took the video card HDMI approach. Instead of providing native audio output, Microsoft used an HDMI transmitter that accepts S/PDIF input for the audio source. HDMI-equipped video cards typically have this type of setup including the Sapphire X1600 Pro HDMI and the MSI NX7600GT Diamond Plus models.

If you think about it, it makes sense. The Xbox 360 Elite can only output Dolby Digital, DTS, WMA Pro or 2-channel PCM. S/PDIF is limited to these protocols, including 2-channel PCM. This, however, is my pure speculation, and we will have to wait for Microsoft unleashes the Elite to the public in the next few weeks before someone is able to dissect it and figure out which HDMI transmitter the Elite integrates.

Onto the 120GB hard drive, the additional space is nice and something users have been pining for. However, is a 120GB hard drive necessary? Microsoft does not allow users to put their own content on the hard drive except music and it is most likely use is for the Xbox Live Marketplace and upcoming IPTV.

I barely use the 20GB hard drive on my Premium and most likely do the same with a 120GB hard drive. My Xbox 360 hard drive has a couple episodes of South Park and a couple XBLA titles, which occupy very little space. XBLA movies occupy approximately 5GB of space for an HD download, but those movies are rental and useless after the rental period.

I suppose the Xbox 360 couch potatoe will find uses for the extra storage space, however, the limited HD DVD output capabilities, limited codec support and lockdown for XBLA makes it a limited HTPC substitute, not to mention with the Media Center Extender capabilities, the additional drive space is moot point.

Microsoft expects to add MPEG-4 and H.264 video codec support with the upcoming fall dashboard update; however, if WMV playback is a sign of things, users should have no troubles playing the files off USB devices, CD and DVD disks.

Although I have my quibbles with the Xbox 360 Elite SKU, it is not without its positives. For an extra $80, you do gain quite a bit of features over the Premium SKU. The extra space, HDMI output and included HDMI cable is surely worth the extra $80. However, if you are an existing owner of an Xbox 360 Premium system, there is no provoking reason to upgrade to the Elite, unless your HDTV has troubles accepting 1080p over VGA and component.

In the end, the Xbox 360 Elite is still a gaming console with a few home theater-esque features. However, for those looking for a gaming console and HD DVD player in one device, it is a terrible choice, considering the Sony PS3’s feature and price. The Xbox 360 Elite will cost $479, couple that with the $199 price tag of the HD DVD drive add-on and you are looking at $678 for a gaming console that possesses sub-par HD DVD playback capabilities and no real additional features.

Sony is able to produce a high-definition gaming console with complete Blu-ray playback capabilities, why cannot Microsoft do the same with the Xbox 360 and HD DVD? A Sony fan boy I am not, a home theater aficionado I am, and I’m disappointed by the Xbox 360 Elite.

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson

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