Hehe.
I thinking the same thing. It could actually be a big hit, although it's something I wouldn't be interested in buying.
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US: $99 Xbox 360 + Kinect bundle coming with two-year subscription ($15 a month)
- Thread starter VOOK
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Hehe.
Boss Man
Member
I want to hate everything Microsoft does with pricing, but honestly...I like it a lot. That price range (even with a monthly fee) will attract a ton of people. Game consoles around the $100 mark get a ton of penetration.
The problem is that $15 seems very steep for...whatever it is that you're subscribing to. If this was a $99 console without Kinect and like $7/month for two years that gets you Gold + $2 a month for the console cost and a warranty then I would be very impressed.
The problem is that $15 seems very steep for...whatever it is that you're subscribing to. If this was a $99 console without Kinect and like $7/month for two years that gets you Gold + $2 a month for the console cost and a warranty then I would be very impressed.
flyinpiranha
Member
What does that have to do with using the device? Of course you need their phone service in order to use their phone service? This isn't a good parallel because you can still use the 360 as a gaming machine after the 2 years. You basically have a 360 with Silver at that point.
Vane_MagicCity
Banned
Sale prices aren't relevent. You could probably find 360's and Kinects on sale too but no one is using sale prices for those to compare to this bundle.
The $15 a month is a payment, not a subscription fee.
ToLateToLove
Member
Ehh.. I'm not sure I follow. Doesn't ordinary stores do this already in US. Buy and instead of paying everything immediately you can choose to pay a smaller sum each month for x amount of time? I must be missing something..
UberTag
Member
You can still use the iPhone as a gaming machine if you default on your payments, too.
Granted, that's not perceived to be its "primary function" whereas gaming is perceived to be the Xbox 360's "primary function".
That's really the obstacle here. People's perceptions of device utility.
Ultimately the functionality you still have by defaulting on either payment plan with either device is pretty similar. In fact, you could make the argument that the Xbox 360 restricts things even more than the iPhone would given that certain apps would no longer work without Gold whereas these apps would work fine on an iPhone via Wi-Fi.
Perceptions are just that. Perceptions. They can be changed.
In fact, one time not so long ago people only considered iPod-style devices so they could listen to their music library anywhere.
Do you mean layaway (you can't take the item home until you pay for it all)? OR No Money Down bullshit? That usually comes with an interest fee when you do start paying it back.
Of course the device will be yours. The question you're answering, that no one has asked, is if you continue to be billed a monthly fee after your contract is up. Essentially assuming, rightly so in the case of most consumers, that they would either forget to cancel the service or assume it was just a typical bill for the device. Since information on this whole thing seems to be pretty scant we can't say whether or not this is how it would all work out.
Until there's a Microsoft website detailing this contract you can't assume one way or the other. It's conceivable that the $15 a month contract would be for services like their music service, Live, etc. That would also provide them a door to continue charging the customer after their contract is up. Note that the original article says "a monthly subscription" not a monthly payment plan.
Vane_MagicCity
Banned
Yeah, store cards that act like credit cards. This is just Microsoft doing the financing for a $40 fee.
All that's going to happen is the lease option will remove the downward pressure on the MSRP prices of the standalone hardware. $600 console not selling? Instead of dropping the price to $400, just introduce a lease plan alternative that costs $99 up front and a 3 year contract of $15-20 a month. And bundle PSN+ so you can say people are getting a "deal" when you're just eliminating the possibility of users to choose a more bare-bones package.
In the first scenario, there will be users who pay only $400 to you. They will buy the system and opt not to buy PSN+ or whatever other service you provide and charge for.
In the latter option? You eliminate the possibility. Everyone has to either buy the barebones for $600, or get the lease plan for a prolonged $650 over a 3 year period. You WILL pay $600+, one way or the other, because they keep base prices high while providing "discounts" only on bundles rather than as an incentive to spur standalone product sales.
Man, it's amazing to me how MS has managed to keep their prices so high this far into the generation via the bundling of Kinect. If this subscription thing becomes popular, they'll be raking in the cash on this old hardware, even for a full year into the lifespan of their new machine.
Boss Man
Member
That's basically a store credit card, and you'd likely end up paying a lot more interest over two years- especially for something in this price range. This is maybe a step below that. Apparently you're getting your money's "worth" or close to it, but a lot of it appears to come in things that most people won't want in the first place like an extended warranty, Kinect, and the streaming stuff.
So yeah, it's a similar concept but you're paying the extra cost back by subscribing to their services.
Vane_MagicCity
Banned
The way I am reading it is that you are buying a bundle, with Microsoft doing the financing.
$99 down, $15 a month for two years. At the end of the years, the contract is over and if you're credit card remains on file, they may charge you $60 for the next year of Live (unless you tell them not to).
The entire bundle is $420 cash or if you use Microsofts payment plan, $460.
Vane_MagicCity
Banned
So you are arguing against the principle of this. Fair enough.
ToLateToLove
Member
Yeah I guess it's something like that. Although you can usually do it interest free or near interest free especially if you do the payment over a short period of time.StateofMind said:
Do you need an income to do it like that in the US?
Read this again:
That bolded section certainly seems to imply that what you're paying isn't necessarily a payment plan on the hardware itself but a service contract. I'm not saying it is one way or the other just to keep in mind it is a possibility. It could even be a precursor to something of a LIVE Platinum service that bundles in a lot more for a $15 fee for the next generation of consoles.
It's designed to gnaw away at your wallet gradually without you realizing, then "encouraging" you to sign up for expensive services by jackin the price up after you've become accustomed to using the service.
I'd rather companies be honest, upfront, and consistent in their pricing schemes.
RoninChaos
Member
Once again, no one is forcing anybody to do anything. They can make a choice, as a consumer, and say I'm not going to buy this.
Boss Man
Member
Expanding on this:
Microsoft's main goal here is to get people subscribing to their services. If their main goal was to get people to buy the console and use subscriptions to counter the price drop it would be a lot more amicable and arguably even more effective than the way this seems to be laid out.
This seems more like you're paying them for the price drop and for services you probably don't want. I get the feeling that $15/month will just be a bit too steep for this to have as big of an impact as it could. Even if it was just knocked down to $10, $5 for Live and $5 for some crap no one cares about- but now you have a console and Microsoft has another subscriber, I think this would be a lot more successful.
Vane_MagicCity
Banned
That implies that you are really only paying $99 for the hardware. No, I believe this is merely a 2 year payment plan at the end of which you will own the hardware and have Live Silver unless you re-up for $60 a year.
And the more complicated the pricing plans gets, the easier it is for the company to "convince" someone to pay more.
No one is forcing you, they're just nudging you in a particular direction by changing the wya they present the cost to you. It's deceit
One would hope.
And this highlights what will get people in trouble with this plan. If you purchase this $99 console +contract and can't make the $15 a month payment.
This isn't true at all. The more complicated something gets (especially pricing) the more consumers are likely to say "fuck it." People actually hate juggling choices, especially complicated ones.
Vane_MagicCity
Banned
So you are saying that they are offering a Live Plus service for 3 times the price of Live Gold and using the hardware bundle for $99 to draw people in.
I don't think that's the case but if it is, I am 100% against it, like you.
That's why you make it SEEM Like a good deal at first glance and even a basic analysis. You want the bad part of the deal to only show up when someone says "what if it was priced this way instead?"
I don't know how this can possibly work. How is MS going to collect the mandatory subscription? Are the stores that sell the $99 console going to sign a contract on the spot or is the console not going to work at all until you connect it to the internet? I don't see what is stopping someone from buying the console and then not signing up for the subscription.
Sho_Nuff82
Member
You're building up a hypothetical scenario that doesn't even reference the more applicable model (Cell phones).
But MS has an incentive to let you keep the box after your contract is up - silver members can still buy boxed software, point cards, DLC, XBLA games, and various other subscription plans. Cable companies have nothing to offer you if you're not paying for their service. In fact, MS is counting on you continuing to buy software for your hardware. A warehouse full of repo'd 360s collecting dust doesn't make them any money.
Again, with a Boxee or Roku, you don't get Kinect Sports and Call of Duty online. Games and interface are the differentiating factor here, as they've always been. MS is alleviating sticker shock to put themselves in competition with Roku and Boxee, while mitigating the risk that people would just buy it for a cheap media box by asking you to put in writing that you will pay for gaming-related services.
As of right now, it's only being offered in MS stores. So you'd sign up for it the same way you'd sign up for a phone contract, with all of your personal information and a credit check. They aren't just going to start handing out $99 360s and IOUs to everyone at Walmart.
Speedymanic
Banned
What expensive services?
And who will be jacking up the price of what? You're not making sense, bro.
Vane_MagicCity
Banned
I think he's saying that this Live+extras will constitute a seperate service from Live that will cost $15 a month (3 times the price of Live). The hardware is the trojan horse.
This is a great option to pay for the beefier hardware that Microsoft will be selling you next gen. Instead of a $600 console taking a loss for MS, it can be a $300 console with a 2 year contract that's making them coin monthly.
It would hardly be the first time someone has subsidized hardware to get you hooked into a service. The service is far more lucrative for MS than the hardware and the initial loss on a 4GB 360 + Kinect would be recouped in 8-12 months of the $15 monthly service fee (remember we're not talking about RRP there we're talking about cost to MS). If the consumer purchases anything on those services, like say a game, movie, or music, the time until the hardware cost is recouped shrinks even more.
AgentChris
Member
If it was a flat $99, I would get one to play Alan Wake and the xbox live Alan Wake. Then donate to some poor person.
From the perspective of a consumer, these $15 monthly fees would probably "feel" like service charges, not payment plans on the hardware. Once the $15 monthly fee goes away, so, too, does their system's media center capabilities and the ability to play video games online.
The pricingp lan is designed to remove sticker shock while conditioning the user to respond to the recurring charges asthough they're associated with the services.
The user may even do a quick calculation and think they're getting a good deal by paying only $60 a year as opposed to the $180 a year divided into 12 monthly payments of $15 they were before.
The recurring service charges and the upfront fees get confounded from the perspective of the user
RoninChaos
Member
So you're saying this is deceptive, and not forth coming?
What's stopping the customer from doing some research? Buying a game console isn't going to get as complicated as buying a home, no matter what kind of mumbo jumbo they come up with.
ToLateToLove
Member
Were I live you don't. Well up to a certain amount at least. I bought an PS3 for about $400 without an income at the time. Of course you can't have any unpaid debts though.xxracerxx said:
Again, you guys need to read what I'm responding to. I was responding to the reason to subscribe to LIVE being Netflix and other similar services. If that's the only reason you'd buy LIVE, in which case the price parity between the contract version and a retail version + Live is minimal, you're better off going with a non-monthly fee, cheaper box. That's it.
The reading comprehension in these responses...
Karak
Member
Pretty much the old Dreamcast style deals they were offering. A really good idea to capture some more peeps.
I can see them test-beding this to test it for next gen systems and trying to offset the possible expensive prices of a next gen system. If it works here I could totally see them doing it on a new console.
I can see them test-beding this to test it for next gen systems and trying to offset the possible expensive prices of a next gen system. If it works here I could totally see them doing it on a new console.
Haunted
Member
I... never thought about this.
Just imagine Sony and Microsoft going that route with the next generation hardware. $250 up front and 2 years of mandatory XBL/PSN subscription service ($15/month) with every purchase.
Just imagine Sony and Microsoft going that route with the next generation hardware. $250 up front and 2 years of mandatory XBL/PSN subscription service ($15/month) with every purchase.
oh my indeed
But that was a one time expense, correct? Or did you make payments for it?
You mean cell phone market?
Vane_MagicCity
Banned
I can honestly say that I am now confused as to what this is so I can't make a solid judgement of it.
Is this merely a payment plan with a $40 financing fee? If so, I see no problem with it.
Is this a more expensive version of Live that is being carried by cheap harware? I would be against that because eventually, this version would become the new Gold and current Gold would become something like "online play only, no TV or internet applciations".
It does if they can resell them. Collect used equipment, refurbish, resell. Make same 200-600 dollars on the same machine. Sure theres parts, labor, and shipping. However with this method they could suppress the second hand market.
They may not do a lease model and rely on moderate financing instead, but there are incentives. Increasingly major players in the industry have been showing less reluctance on exploiting those factors.
Locking people into an ecosystem is a cell phone thing? Huh?
Could work, long as the don't get greedy. Once saturation hits and your competition offers similar value for less the model loses viability.
I didn't understand your ecosystem comment then, I thought you meant more of the payment plan to us the product.
If you are talking about companies wanting to lock in brand loyalty then that is an every company playbook move.
MrGreencastle
Member
I wonder if this will eb US-only. Are there any Microsoft stores in Canada?
Sho_Nuff82
Member
You were responding to a poster that already owned a 360 though. No one is going to buy MS' box unless they are, at even the most minimal level, interested in traditional console games or Kinect. And Kinect, as an interface, is now a selling point in and of itself for MS' box.
Now if someone signs a 2-year contract for a refurb 360, then I'd have to say they were out of their minds.
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