So, MS is now offering the 4GB 360 with Kinect for $99. The catch? You have to agree to pay for 2 years of Xbox Live Gold. ($360) Much like a cell phone plan, there's an ETF schedule. It's currently on a trial basis, but could take off if successful.
What does everyone think of this new pricing scheme? Think we'll see more of it either this or next gen?
Title: Re: Microsoft's New Pricing Model
Post by: TJ Spyke on May 07, 2012, 11:04:42 PM
It's cheaper to but it right away. $300 for that 4GB Xbox 360 with Kinect + $120 for 2 years of Xbox Live Gold for a total of $420 + tax. This bundle has you ending up paying $460. It's like place like Rent-A-Center, make small payments but in the end you pay more. I don't know, I can't see this being super successful. But I like more options for people.
Title: Re: Microsoft's New Pricing Model
Post by: SixthAngel on May 07, 2012, 11:14:39 PM
I despise it because I hate the fact that they ask you to pay for live. They even have services you have to pay for behind the pay wall. I decided I would never pay for online for a console again slightly before the end of the original xbox's life.
With this out there testing the waters now you can tell it is pretty much their plan to make the next xbox look cheaper. They will advertise it as 100 bucks cheaper but force you to sign up for live for 3 years. I just hope that people balk at getting a contract when purchasing a game console or realize the competition lets them play online for free.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on May 07, 2012, 11:16:45 PM
It's really just designed for people not willing or able to pay $300 for a system, but can make Xbox Live Gold payments for two years. I like that MS is trying to expand the market to lower income levels, but I'm wondering how they'll expect those people to play games. Sticking to XBLA games may run the hard drive thin. Buying used games does nothing for MS, and renting can only do so much for them. It'd be interesting to see if they'll just depend on the subscriptions for the cash flow.
Title: Re: Microsoft's New Pricing Model
Post by: Chozo Ghost on May 08, 2012, 12:01:51 AM
The fact you have to pay to play online with the 360 is the sole reason why I choose the PS3 over it. I wonder how many potential customers Microsoft has missed out on as a result of this. I doubt I'm the only one.
Title: Re: Microsoft's New Pricing Model
Post by: Oblivion on May 08, 2012, 12:04:55 AM
inb4 Microsoft has better online because I pay for it.
Title: Re: Microsoft's New Pricing Model
Post by: Chozo Ghost on May 08, 2012, 12:17:14 AM
inb4 Microsoft has better online because I pay for it.
Probably true.
Title: Re: Microsoft's New Pricing Model
Post by: SixthAngel on May 08, 2012, 12:32:17 AM
Hopefully it blows up in their faces when they make "Pay for online" an actual selling point of the console. It may look good to write the lower price on paper but mom and dad aren't going to want to sign a contract for their kids video games.
Title: Re: Microsoft's New Pricing Model
Post by: Oblivion on May 08, 2012, 12:33:47 AM
Hopefully it blows up in their faces when they make "Pay for online" an actual selling point of the console. It may look good to write the lower price on paper but mom and dad aren't going to want to sign a contract for their kids video games.
This is not new, you can already do something like this with rent-to-own places like Rent-A-Center (which does have video game systems too). This is just Microsoft cutting out the middle man (and for a cheaper price than what those rental places have them for).
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on May 08, 2012, 12:53:12 AM
It's more akin to a cell phone data plan than a rental service. You don't get to return the system to MS when you don't want to pay for it anymore (AFAIK).
Title: Re: Microsoft's New Pricing Model
Post by: Kairon on May 08, 2012, 01:58:16 AM
Maybe Sony should've done this when the PS3 launched...
Title: Re: Microsoft's New Pricing Model
Post by: GoldenPhoenix on May 08, 2012, 02:11:48 AM
Seems to be a bit of a rip off to me considering you can find 12 months of Xbox Live Gold for around $30-40 from various etailers. I could have swore you only paid $10 monthly for a month's worth of Gold anyway (unless this is for another territory).
Title: Re: Microsoft's New Pricing Model
Post by: TJ Spyke on May 08, 2012, 02:15:43 AM
It's $60 a year (unless you find a card on sale), which averages out to $5 a month.
Title: Re: Microsoft's New Pricing Model
Post by: GoldenPhoenix on May 08, 2012, 04:05:42 AM
It's $60 a year (unless you find a card on sale), which averages out to $5 a month.
I am referring to paying month by month, and they charge $9.99. I am not really understanding how they justify the $14.99 a month, when the month by month payment plan is still $5 less.
Title: Re: Microsoft's New Pricing Model
Post by: Uncle_Optimus on May 08, 2012, 05:37:54 AM
After reflecting on this surprising announcement, though I doubt it will make any large splash in the market at this point in the product's life cycle, I have to say it is a good play on MS' part. This kind of subsidization model is worth trying in the case there is a sizable segment of the potential userbase for whom would like to use the Live service but couldn't justify the upfront cost of the hardware: it lowers the barrier of entry.
As others here have already mentioned, this could make for a good study of the market specifically allowing MS to gauge if their is a subsidization play they could make with the next "Durango" XBox. The ramifications could be as wide spread as convincing MS to improve the hardware beyond what they may be willing under the current console development model, if they felt a large enough base of customers would be willing to sign two-year high margin Live service contracts. That is a far-fetched statement tho, I admit!
On a somewhat related note, following the link in the OP, I see that the deal is redeemable in local Microsoft Stores only? I did not know they still had those...I imagine there cannot be many?
Title: Re: Microsoft's New Pricing Model
Post by: ejamer on May 08, 2012, 09:48:04 AM
Mmm... Some of you guys might be overestimating how savvy the "average" consumer is. If they get a low entry fee, who cares about signing up for years of service?
I also think it's a great move by MS because they are launching a preemptive strike against Wii U and any other competitor planned in the near-term. Anyone who buys this "deal" has signed on for years, making it far less likely they'll be game for another console a few months later -- especially when they are still making monthly payments on the new 360 they just grabbed.
That said, I think it's a poor deal for consumers. But as long as the low entry point gets people in the door it could end up being a winner for MS.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on May 08, 2012, 01:58:19 PM
It's $60 a year (unless you find a card on sale), which averages out to $5 a month.
I am referring to paying month by month, and they charge $9.99. I am not really understanding how they justify the $14.99 a month, when the month by month payment plan is still $5 less.
Microsoft is basically just spreading out the cost of the system over the two years. You pay 100 now and the other 200 over the two years of paying a premium for Xbox Live.
Title: Re: Microsoft's New Pricing Model
Post by: Fatty The Hutt on May 08, 2012, 02:21:57 PM
The fact you have to pay to play online with the 360 is the sole reason why I choose the PS3 over it. I wonder how many potential customers Microsoft has missed out on as a result of this. I doubt I'm the only one.
You are not the only one. There is another Skywalker
Title: Re: Microsoft's New Pricing Model
Post by: Ymeegod on May 09, 2012, 09:26:57 AM
Well MSRP pricing on an arcade/kinect xbox 360 is $299 and Xbox live for two years is $120 so $420 total. Vs $99 plus an monthly fee of $15 for 24 months (making the total $460) which means you'll save yourself mearly $40 for paying in full up front? Of course there's discounts and whatnot to consider but still for people short on cash this might be the deal breaker.
Have to wait and see how consumers take to this.
Title: Re: Microsoft's New Pricing Model
Post by: Ceric on May 09, 2012, 09:37:57 AM
Paying that $40 premium to spread the payments out and not have the argument with the significant other about paying for Live could be worth it for some people.
Title: Re: Microsoft's New Pricing Model
Post by: Uncle_Optimus on May 10, 2012, 03:57:19 AM
Well MSRP pricing on an arcade/kinect xbox 360 is $299 and Xbox live for two years is $120 so $420 total. Vs $99 plus an monthly fee of $15 for 24 months (making the total $460) which means you'll save yourself mearly $40 for paying in full up front? Of course there's discounts and whatnot to consider but still for people short on cash this might be the deal breaker.
Have to wait and see how consumers take to this.
Hey maybe its opportunity cost...that money saved upfront can be used to buy Facebook stock or something... Microsoft is actually targeting a very savvy customer segment! :p
Title: Re: Microsoft's New Pricing Model
Post by: SixthAngel on June 06, 2012, 02:44:04 PM
They are expanding this program to other stores now.
Painfully obviously they are planning this for their next system and it if it comes to pass it means I won't even be glancing at the next xbox.
Title: Re: Microsoft's New Pricing Model
Post by: ejamer on June 06, 2012, 03:29:57 PM
They are expanding this program to other stores now.
Painfully obviously they are planning this for their next system and it if it comes to pass it means I won't even be glancing at the next xbox.
This isn't (necessarily) a terrible pricing model. It does let MS market and sell more expensive hardware to people who would normally balk at the large up-front cost. As long as you look at the total cost instead of ignoring the the future payments and make a value-based decision based on all the information, you'll do fine.
Of course, the very reason that MS likes this pricing model is that most people don't consider or care about overall cost. It increases profit when people overpay for hardware and are willing to get herded into long-term contracts at potentially unfavorable rates. Just use your head before you buy and decide if it's really worth the asking price.
Title: Re: Microsoft's New Pricing Model
Post by: ShyGuy on June 06, 2012, 09:32:20 PM
Do they give you anything for subscription besides Xbl Gold? Hulu? Netflix? ESPN 8 "the Ocho"?
Title: Re: Microsoft's New Pricing Model
Post by: Shaymin on June 06, 2012, 10:19:05 PM
ESPN if your ISP provides it. Netflix, Hulu+, HBO et all require separate subscriptions.
Title: Re: Microsoft's New Pricing Model
Post by: Chozo Ghost on June 06, 2012, 11:33:20 PM
The xbox 360 is 7 years old now, so it should see a price drop to $99 anyway without any hoops or hassle.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on June 06, 2012, 11:49:53 PM
Not if it's still selling at w/e it's current price point is. Plus, the components have been updated considerably to reduce the failure rate.
ESPN if your ISP provides it. Netflix, Hulu+, HBO et all require separate subscriptions.
HBO Go and Watch ESPN are free with your cable subscription (if your provider allows it), to be clear. But yeah, all that other stuff requires you pay both for them an Xbox Live Gold.
Title: Re: Microsoft's New Pricing Model
Post by: Chozo Ghost on June 07, 2012, 12:49:40 AM
Not if it's still selling at w/e it's current price point is. Plus, the components have been updated considerably to reduce the failure rate.
They've also been updated considerably to reduce the manufacturing cost, I'm sure. The Wii U is coming out and the 360 generation is coming to an end, so Microsoft should strongly consider a real price cut. Sony should as well.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on June 07, 2012, 12:55:25 AM
Yeah, they probably should, but we won't see it until the fall. And it's not about manufacturing costs. A NEW thing is harder to make than an OLD thing, even if the "new" thing is just a better version of the old thing.
Title: Re: Microsoft's New Pricing Model
Post by: Chozo Ghost on June 07, 2012, 01:09:14 AM
They aren't making a new thing, though... the 360 is 7 years old. The design of the circuit board and all that might be new, but they are condensing all of that down and simplifying the process so it should be getting cheaper. Its a new version of an old thing, but it still should be cheaper than it was 5 years ago.
Title: Re: Microsoft's New Pricing Model
Post by: TJ Spyke on June 07, 2012, 09:48:18 AM
ESPN if your ISP provides it. Netflix, Hulu+, HBO et all require separate subscriptions.
HBO Go and Watch ESPN are free with your cable subscription (if your provider allows it), to be clear. But yeah, all that other stuff requires you pay both for them an Xbox Live Gold.
ESPN is, but you need a subscription to HBO to use the HBO Go app.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on June 08, 2012, 01:12:02 PM
They aren't making a new thing, though... the 360 is 7 years old. The design of the circuit board and all that might be new, but they are condensing all of that down and simplifying the process so it should be getting cheaper. Its a new version of an old thing, but it still should be cheaper than it was 5 years ago.
A new version of an old thing isn't inherently easier to make than the old thing unless it was designed to be easier to make. The parts are designed to run cooler, take up less space and little else. Switching all of your manufacturing facilities to make the new version isn't free either, so costs don't go down as quickly.
ESPN if your ISP provides it. Netflix, Hulu+, HBO et all require separate subscriptions.
HBO Go and Watch ESPN are free with your cable subscription (if your provider allows it), to be clear. But yeah, all that other stuff requires you pay both for them an Xbox Live Gold.
ESPN is, but you need a subscription to HBO to use the HBO Go app.
True, but if you're not getting HBO, then what the hell are you watching? ;)
Title: Re: Microsoft's New Pricing Model
Post by: Chozo Ghost on June 08, 2012, 08:48:00 PM
The chips get smaller over time due to Moore's law. Its not like they have to bust their ass to figure out how to shove all of that together in as small of a space as possible... because due to Moore's law the chips will just get smaller on their own. You don't have to go out of your way to make a smaller product that runs cooler. It will just happen naturally pretty much.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on June 09, 2012, 01:04:36 AM
Chips don't magically shrink themselves because some guy noticed some **** about transistors several years ago (or w/e the exact words were). IBM takes that **** to heart and strives to adhere to Moore's Law as best as possible. It takes effort. Otherwise, MS could just send their engineers home until it's time to make a new system.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on June 25, 2012, 09:56:57 PM
The deal is now expanding to Best Buy and GameStop. (http://www.engadget.com/2012/06/25/microsofts-xbox-360-99-on-contract-deal-expands-to-best-buy-g/) Must be working out for them.
Title: Re: Microsoft's New Pricing Model
Post by: Uncle_Optimus on June 27, 2012, 12:27:08 PM
The deal is now expanding to Best Buy and GameStop. (http://www.engadget.com/2012/06/25/microsofts-xbox-360-99-on-contract-deal-expands-to-best-buy-g/) Must be working out for them.
That or they realized that almost no-freakin-body can find a "Microsoft Store" around them. Their Surface tablet will start out with limited distro as well, I wonder if MS is planning to build out their retail quite a bit in this short term.
Title: Re: Microsoft's New Pricing Model
Post by: nickmitch on June 28, 2012, 05:39:16 PM
That would make sense. It's possible people sought out MS stores for the Xbox deal, and they would likely do it for the surface. Plus, it allows MS to launch the Surface without having to hit full production capacity.
