Speaking with Next Generation, Microsoft liar-in-chief group product manager Aaron Greenberg had this to say about the high price of the new 120GB drive:
If you compare what we are offering with a real plug-and-play drive the closest thing would be to take a 120 gig self-powered external PC drive and in that case we are seeing those retail at anywhere from $160 to $200 for comparable laptop sized external hard drives.
Nice try, but simply not true: in fact, here's a 120GB laptop drive that you can buy bundled with an external USB enclosure for just $115.
So, what's the real reason for the price gouging? Simple:
If you started with the core $299 SKU, everything we have done is based on adding storage. If you had the $100 hard drive that gets you to $399. If you added the $179 hard drive to the $299 SKU that gets you to $479 which is the Elite SKU so there is consistency in the way we think about this.
That is, it costs too much because they want it to cost too much. Don't buy it.
via Kotaku