CompAmerica Hopes To Give Xbox Run For Its Money

CompAmerica, a Cranford, N.J.-based systems builder, was able to hit the low price point by using Advanced Micro Devices&' Sempron CPU. The models, which have disabled 64-bit instruction sets, are available at an exceptionally low price and perform better than a comparable Intel Celeron D, according to CompAmerica CEO Jack Shulman.

The company also is offering a branded model for $299, which includes 256 Mbytes of memory and an 80 Gbyte hard drive. CompAmerica constructed its barebones version for a $229 price point so that partners could offer a decent mark-up and still compete against the Xbox 360 at its base $299 price point.

Microsoft believes Xbox 360 systems will land in 3 million new homes this holiday season. Since game systems are largely sold at a loss—Microsoft makes its money on games for the device—CompAmerica is determined to offer an alternative to its partners selling desktops into the home.

In particular, Shulman is concerned that the Xbox 360, which functions more like a PC than previous gaming systems on the market, may cannibalize low-end system sales from its partners.

“When we see a loss leader released before the holiday season that might take away our PC sales, we are going to respond,” he said.

But not all system builders are looking at low-cost systems as an alternative to the Xbox 360. For example, John Samborski, vice president of Ace Computers, Arlington Heights, Ill., said the system builder will focus on Media Center PCs using Microsoft&'s Windows XP Media Center Edition to push higher-end systems into the home.

The Xbox 360, said Samborksi, has limitations that may bother users of traditional PC systems, such as a small amount of onboard storage. “If customers don&'t expect to grow the system, the Xbox is a good play for them,” he said.

He noted that systems priced at $299 aren&'t the smartest price point for his partners to play with. Instead, Ace is directing partners to Media Center PCs that also facilitate add-on sales and in-home services.

“If you are looking at selling boxes in the Xbox price range, you are liable to get hurt by them all the time,” he said.