The rumors were true! Microsoft is now offering the 4GB Xbox 360 with Kinect for $99 with a two-year contract. Monthly service for Xbox Live Gold costs $14.99 per month under the agreement. Similar to mobile-phone contracts, the subsidized Xbox 360 comes with an early termination fee should you cancel service. The fees range from $250 to $12 depending on when you cancel. Check out the handy chart below for reference.
Like I said before, I’m super curious to see how popular this model will be. In North America, subsidized phones are the norm. For various reasons, some gamers seem to have a problem with a subsidized console. That said, I suspect that vocal minority is comprised of enthusiast gamers and that mainstream consumers will be attracted to this deal.
What do you think? Will Microsoft have success selling the Xbox 360 with a subscription?
Update: RPadholic smartguy noted that in many regions, the console will be taxed at the full $299 retail cost. This is similar to taxes paid on subsidized phones.
Well, two years until the next xbox comes out. Or less than that so Microsoft can "leverage" people to terminate their subscriptions early in order to upgrade.
I'm really curious to see what will happen with this.
That's an excellent point. All the more reason to think that this deal is geared towards the mainstream.
Further proof (to me anyways) is that they are bundling this with the Kinect (which to me still only has mainstream/casual gamers in mind) as well as the 4gb system instead of the 250gb system (4gb is no where near enough for me. Up until I cleaned up my hdd recently I only had 40gb left of my 250gb hdd). Only casual gamers could suffice with 4gb I think.
The difference of $40 is immaterial over 2 years. If $40 will cripple you over the span of 24 months then you shouldn't be wasting time and money on games.
I do think some other premium Gold service should be included, much like OnStar is with GM vehicles for a trial period.
You know what this "early termination fee" is, right? At first, it simply looks like another bid for money, but to me it looks like used console hatred. If you signed a contract saying "I will pay for Xbox Live on this system", then you can't sell it! Not only would the contract forbid it, but the only way around it would be paying a hefty fine.
See, let's say the next-gen Xbox comes out in 12 months in 2013. You bought this system exactly one year before the new one hits the shelves. By now, you have paid around $270 for the Xbox 360 and you're hoping to trade it in for the new one. A used Xbox 360 costs around $125, so you'll probably get around $60 for it. BUT, the contract you signed requires you to pay $144 to terminate the contract after 12 months. That means that selling the console at this time will actually cost you around $85, rather than help you save money. Make sense?
I don't see the problem here. An ETF so simply the portion of the device you haven't yet paid for. I really have no problem with them offering this way of financing the devices. It's just yet another contract to finance. Much like many other things, I don't know why a game console seems sacred.
You could trade it in w/o paying the etf as long as you continued paying the monthly fee.