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Microsoft pushes forward with its Xbox 360 subscription program
Microsoft pushes forward with its Xbox 360 subscription program
October 23, 2012 | By Mike Rose

October 23, 2012 | By Mike Rose
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Following a pilot period for its $99 Xbox 360 subscription program, Microsoft now plans to make the scheme more freely available, with new bundle types also announced.

The program was launched earlier this year, giving consumers the option to pick up an Xbox 360 with Kinect for a cheaper initial fee, and instead pay a two-year subscription. The pilot ran in retail Microsoft stores, before expanding to Best Buy and a select number of GameStop stores.

In the coming weeks, Microsoft plans to expand the offer to Wal-Mart and Toys R Us stores, as well as all GameStop outlets. A number of new subscription types will also be made available, including an Xbox 360 with a 250GB hard drive for $99, and the same device with Kinect for $149 -- both will require a two-year, $14.99 a month subscription.

Talking to the Wall Street Journal, Microsoft's GM of marketing Matt Barlow explained, "We wanted to see if we would get sustained consumer excitement and willingness from partners to get this in retail."

Thanks to the success of the scheme, Barlow says that Microsoft plans to maintain it for the foreseeable future, and will also be providing the offer to international customers at some point.

He also suggested that future product launches, such as the next Xbox console, will likely offer a similar subscription payment option. "This type of program is pivotal to our business," he added.


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Comments


Harlan Sumgui
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I'm so glad this working out because it will mean more customers and better hardware for the next console cycle. Selling a discounted console with a $20/month contract is much easier than selling a $500 console with no contract. And we are looking at a $500 BOM 720 right now.

2013 will be pretty exciting, I just hop MS doesn't wreck the end user experience with their over-monetization strategies.

Duvelle Jones
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Frankly, that is a place that I honestly don't want gaming to go into. I am not of the opinion that a subscription based pricing for hardware is really going to give people value over the course of a contract.

Not that I am oppose to Mircosoft making money, but if it come down to having modest hardware at a affordable price and this subsidizing model for bleeding edge hardware... I will take the price that I can walk away with.

I might be rather unique in that mind set, but I don't think that gaming survives a downturn with pushing the boundaries of technology. And history shows that constantly with the console market.

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Tom Baird
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I personally have difficulty agreeing to financing. I know when I can afford something today, I don't like having to guarantee I can afford something in 3 years.

I generally find a plan like they are offering is for people who are bad at Math.

I can buy an Xbox 360 with Kinect for $299.99 on their site, or I can buy the same product for a staggering $508.76 (=$149 + (14.99 * 24)). Is it really worth it to save $150 today so that I can spend an extra $358 over the next two years?

It's the same with $400 dollar phones, marked as $20 with a 3-year term. All that says is that you are getting so screwed on that contract that they will give you $380 worth of stuff just to get you to sign it.

Edit: This can become an even worse proposition when you take into account that there is a lot of predictions around MS announcing a new console in the very near future, meaning that the thing you are financing for could become deprecated within the 2 years you are paying for it.

Adam Bishop
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@ Tom

Keep in mind that the subscription includes other things, like an Xbox Live Gold account, that the user would still have to pay for if they bought the system for one up front cost.

Tom Baird
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@Adam
But Gold is $5 a month, which over 2 years + the Kinect console would total $419.99, which is still ~$90 less than the subscription they are proposing.

As well, in 1 year I can decide that if I don't like Gold, and don't consider it worthwhile, I can stop paying for it and save another $60 off the cost, and I still get to use/keep my Xbox for all the other things I use it for.

I get smaller per-month costs, and have the option to back out when I no longer want the service or come under hard times and can't afford to keep up the payments. This is also a better deal should I decide to upgrade to whatever new console or technology MS may announce over that 2 year span, since I am not locked into their financing payments.

I still feel this subscription is simply for people who cannot effectively do the math, and overall it is a bad value proposition for the customer compared to existing models.

Doug Poston
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@Tom: I agree with you 100%, but there is plenty of proof that lots of people are bad at math.

I live in a city built on bad math. ;)

Bob Johnson
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@Doug

So true.

Tom Baird
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@Anthony
How is an extra $90-$150 dollars for the product over two years(depending on how much you value Gold), not the equivalent of using a credit card and paying interest? The major different I can see is that with a Credit card you can buy it all out on your own schedule, and skip the extra payments if you get the chance.

@Doug
I do agree with that, but it's still frustrating to see MS launch something that is just a bad deal relative to what it already offered, and people seeing it as something good for the consumer, when the only beneficiary of this deal is MS.

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Ian Hamblin
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I think from the comments here, it shows that having both options would be beneficial. Personally I think it is a good idea. It'd be better if they plan to release a free game every now and then with the subscription.

I also think it could be a good strategy in keeping people playing the console, as you paying for it monthly, you may feel an incentive to play it a little more than your other consoles if you have any.

Jonathan Murphy
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This is why I'm avoiding the 720. I barely play games, why should I have to pay $10 a month? If Sony and Nintendo get serious with their next gen online service being free, Microsoft is screwed. Emphasis on, "If." IF I played a lot online... IFFFF Then $20 a month is a bargain.


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