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Microsoft Is Going Ahead With the $99 Xbox 360/Two-Year Subscription Plan

Rumored promotion through Microsoft's retail stores comes to fruition, includes Xbox Live Gold Membership and Kinect.

Rumors were abound last week that Microsoft was planning some sort of insane-sounding $99 Xbox 360 deal that came encumbered with a two-year subscription contract, and now the console maker has announced exactly that. Those who purchase an Xbox 360 from Microsoft's own retail outlets will be able to buy a new console, complete with an Xbox Live Gold Membership and Kinect, for $99, provided they sign up for a two-year contract with the company.

All this for only $99!* (*$14.99 monthly subscription fee applies. Two-year contract required. This still costs more than a regular Xbox 360 bundle.)

The subscription fee for the contract is $14.99 per-month, which roughly amounts to just under a hundred dollars more than you'd pay for all of the included Xbox stuff up-front. There is also an undisclosed "termination fee" for those who want to break their contract early.

It's a cell phone model as-yet-unused in console gaming, but could be successful for the seven-year-old console, provided people can actually find a Microsoft Store to buy one of these things. The number of nationwide locations for Microsoft Stores is relatively low, though if you happen to live within relative driving distance of Scottsdale, Arizona's beautiful Scottsdale Fashion Square, or one of the two separate locations in New Jersey (wait, what?), then you're in luck.

Once you're done contemplating the irony of this deal for a device that relies heavily on digital content being exclusively available through hard to find brick-and-mortar retail outlets, you can find the complete list of Microsoft Store locations here.

Alex Navarro on Google+
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Posted by Winternet

20 locations on the US? Well, this is can be called an experiment, at best.

Posted by Lokno

@Wudz said:

I'm mostly curious to see what the early termination fee is. It's got to be pretty substantial if you cut out at the very beginning, right? Otherwise you'd be able to pay the price of the console, the termination fee, and buy two years of gold for way less than you would get it paying monthly at fifteen bucks.

It's in the terms Starts at 250 and goes down every month over the course of the subscription.

Posted by sarahsdad

Maybe too far off topic, but is installing games to a hard drive no longer a Thing that needs/ought to be done? I had heard that it wasn't AS necessary with the slim console, but was never too sure that wasn't at least 50% hype.

Posted by onan

@Alex said:

@devilzrule27: When you consider the huge chunks of the country currently unserviced by Microsoft Stores, I am just surprised they would shove two of them into a state as comparatively tiny as New Jersey.

Especially when it's right next door to the much more lucrative New York dollar, and yet zero locations in New York state, let alone NYC. (e.g., I don't even WANT to know what ridiculous amounts of money the Times Square location generates for Toys R Us.)

Posted by SlightConfuse

That 4 gig hard drive is a deal breaker

Posted by usgrovers

There is no way this isn't a "pilot program" for a next-gen pricing model. It'll be interesting how something like this will change the early adoption rates of the next Xbox, but I can imagine it being pretty successful.

Posted by Franstone

A little late in the game if you ask me.

What clueless fool would buy into that with a new generation on the horizon?

Oh wait, clueless fools would...

They should have done this a year or two ago if they wanted to hook potential customers.

Then bam, you liked that console? Well looky here, a brand new one with a similar payment plan to sink your teeth into now that you are addicted.

Posted by Stepside

No thanks.

Posted by handsomeb

@jozzy: I can see the logic in that, and that's probably why it's only available at MS stores. In a launch window I think it's a bloody brilliant manuever and could change pricing structures across the board, but right now it seems kind of risky PR wise unless there is some sort of benefit or perk for the adopters.

To me this says there are no plans for a new console launch until late 2014 or maybe even 2015.

Posted by Lokno

@Doctorchimp said:

@Lokno said:

Xbox 4GB with a Kinect and a Gold Account for two years comes to: $199.0 + $68.98*2 + $149.99 = $486.95

The actual cost of this bundle is $99.0 + $14.99 * 12 months = $458.76

So unless I missed something this is a slight discount, at least at retail prices for what's provided. Also, you don't need to pay nearly as much upfront, which can be huge for some people.

You're using the wrongnumbers

Ouch, forgot about the kinect bundle. So drop 50 bucks from my standard estimate. And of course deals you can get are all on to of that. And the larger question of "does anyone need a kinect?" is a factor as well.

Posted by Joey2683

You can get a one year xbox live subscription code instantly on amazon for $48. If you pay the standard $14.99 a month for one year that's $180. Who works in the marketing department at Microsoft?

Posted by Doctorchimp

@Lokno said:

@Doctorchimp said:

@Lokno said:

Xbox 4GB with a Kinect and a Gold Account for two years comes to: $199.0 + $68.98*2 + $149.99 = $486.95

The actual cost of this bundle is $99.0 + $14.99 * 12 months = $458.76

So unless I missed something this is a slight discount, at least at retail prices for what's provided. Also, you don't need to pay nearly as much upfront, which can be huge for some people.

You're using the wrongnumbers

Ouch, forgot about the kinect bundle. So drop 50 bucks from my standard estimate. And of course deals you can get are all on to of that. And the larger question of "does anyone need a kinect?" is a factor as well.

Also maybe this is just from the fact that I sell cell phones at my job, but what I haven't heard anything about is the taxes and fees. If taxes and fees are present you can bet that 15 dollars will magically turn into 25 dollars a month.

Posted by Goldanas

@Lokno said:

Xbox 4GB with a Kinect and a Gold Account for two years comes to: $199.0 + $59.99*2 + $149.99 = $468.97

The actual cost of this bundle is $99.0 + $14.99 * 12 months = $458.76

So unless I missed something this is a slight discount, at least at retail prices for what's provided. Also, you don't need to pay nearly as much upfront, which can be huge for some people.

Lokno is right. Certainly you can get XBL cards for $35.99 if you look hard enough or wait for one of Amazon's promotions, but most people seem to completely forget about that necessary fee of $59.99 to play online. To be fair though, if you're lucky enough to find a 4 GB kinect bundle, they were usually $299.99, which is a $50 discount, and they're available on Amazon right now.

But, that's roughly $320 ($300 at Amazon's current prices) I don't have to pay up front. I can afford a scant $99 and $15 a month especially if it means I'm getting a close approximate value to what I would pay otherwise. XBL is already $5 monthly; and extra $10 is not so bad. A $0 to $50 markup is not a big deal at the end of the day for that kind of value.

I happen to live in Southern California where there are loads of Microsoft stores (some within walking distance), so I wouldn't be surprised if I end up getting this as a Dance Central 2, Shadow Complex, Banjo Kazooie, Perfect Dark, Fez, Trials, Steel Batallion, and whatever-else-comes-to-mind machine.

Any Xbox Friends have any recommendations for any other games that aren't also on the PS3 or PC?

Posted by kennybaese

The fact that it's only available in MS Stores is unfortunate, but I don't really understand the universal panning of this idea. While it's not very interesting for the XBox 360, a plan like this is very compelling for, say, a new XBox. I had to save up for a year and a half or so to be able to buy the console I have now at $400 or $500 or whatever it was at the time. Only having to put $100 bucks and pay the rest of it off over two years is actually pretty compelling and something I'd definitely consider on a new console, especially given that it comes with XBL Gold membership.

Posted by handsomeb

@Zor said:

And coming next year, game time restriction and data caps for Xbox Live... Pay $15 a month to get 20 hours or 2 gbs, $30 for 40 hours or 4 gbs... etc... and only 10 cents per message...

Am i the only one worried about how they are coping Cell phone companies pricing schemes?

I think that's more likely to come from your ISP than Microsoft.

If the next console has more digitally focused content distribution then there is no way they can afford to make you pay for data too.

Posted by Goldanas

@Doctorchimp said:

Also maybe this is just from the fact that I sell cell phones at my job, but what I haven't heard anything about is the taxes and fees. If taxes and fees are present you can bet that 15 dollars will magically turn into 25 dollars a month.

Oh, Jesus, I completely forget about the huge tax values on subsidized products. You pay the tax on the whole item. My phone had like 50 bucks in tax on it, on that initial purchase.

I'll have to pop into Microsoft and find out what their deal is.

Posted by CommodoreJenkins

Strangely enough, I live near one of the New Jersey locations.

Edited by Goldanas

@alex said:

undisclosed "termination fee"

They're right there in the terms and conditions in the link you provided.

Year One of Subscription (Months Post Purchase)

Months Post Purchase

1

2

3

4

5

6

7

8

9

10

11

12

ETF for Cancellation

$250

$250

$250

$240

$228

$216

$204

$192

$180

$168

$156

$144

Year Two of Subscription (Months Post Purchase)

Months Post Purchase

13

14

15

16

17

18

19

20

21

22

23

24

ETF for Cancellation

$132

$120

$108

$96

$84

$72

$60

$48

$36

$24

$12

$0

Posted by handsomeb

@Doctorchimp said:

But even then if they don't have the money to pay a few hundred upfront, then maybe they should save up some so they aren't hemorrhaging an extra hundred over the course of a couple years. It's a bad purchase for all people.

You just described the world economy. Pay more than retail over time to get what you want right now.

Posted by bowarpowerd

There's also a Microsoft store at the Mall of Amercia...literally right across from the Apple store. /facepalm

Edited by NTM

Wait, I'm ignorant on this one. What's the purpose of the two year subscription? I'm just thinking about how most of the stuff on 360 that doesn't have to do with games is pretty worthless (to me at least), and if that's the case, is this even a good deal? Also, if it's not, I hope this doesn't convert over to the next Microsoft console.

Edit - Never mind, I read about it. So, if someone were to do this, and keep up with it, at the end of two years, they would have payed $360 (ha, funny), while if you would just buy a new console (from the time it came out) it'd be $399 or $499? I think if they were to adopt this way for next gen consoles, they should at least give us a choice which way we'd like to pay, 'cause I think different people will only be able to pay one way or the other, and some may want to pay the other way even if one were to cost a little more. Shoot, as long as I can play games, I don't care.

Edited by TyCobb

I think this is an extremely smart move. There are people who can't afford the full price of the console and a gold membership right up front, but can easily afford the monthly payment.

Yes, the total cost is more in the end, but I would think of it as you paying interest. It's no different than buying a car if you think about it. The car is $15,000. You make a down payment $5,000. You are now left with $10,000. Your payments over the next 5 years is not $166.67 a month. It is more like $180 because of the interest you need to pay for borrowing the money to pay for the car. Yes, I know the Xbox monthly fee is a lot more than 7% interest, but you get the gist.

With all that being said, this could be the start of something scary. If this is truly successful, what stops Microsoft or Sony from actually now attempting to make a profit on console sales at launch? In case those reading this don't know -- consoles are sold at a loss. This means each console is sold for less than what it cost to make. I would hate for them to start bumping the price even higher just to make the subscription look even more appealing.

Posted by handsomeb

Has there been confirmation on this only being available on the 4gb bundles?

Posted by sarahsdad

@handsomeb said:

@Doctorchimp said:

But even then if they don't have the money to pay a few hundred upfront, then maybe they should save up some so they aren't hemorrhaging an extra hundred over the course of a couple years. It's a bad purchase for all people.

You just described the world economy. Pay more than retail over time to get what you want right now.

I think I just had an epiphany, and realized on a small scale how my grandparents probably felt about pretty much every major purchase I've ever made.

Posted by nick_verissimo

Let's call a spade a spade here and admit that this is all an experiment on Microsoft's part. The console has been out long enough that they can warrant doing some market testing and I think this is kind of interesting to be truthful. I kind of want to know who would actually be interested in doing this and if companies would go for this in the future. We do it with cell phones already, why not try it out?

Posted by Chubbaluphigous

The funny thing is that they don't have one of these stores in the Seattle area.

Posted by algertman

What a joke.

Posted by Jimi

Well this is dumb.

Posted by acas2011

Hey wait a second, I'm within in driving distance of the beautiful Scottsdale Fashion Square.

Posted by darkdragonmage99

4g you've gotta be fucking kiding me

Posted by DreDavis

So, is this a strictly US thing? Probably, I guess, since it's limited to Microsoft stores which, as far as I know, are not located in Europe. Damn, I think I might have answered my own question.

Posted by Paindamnation

Costs more to term then buying the whole thing. Oh Microsoft you scoundrels.

Posted by DrDarkStryfe

If this model works to their liking, you will see this plan being used for their next console at launch.

Posted by lordgodalming

@Chubbaluphigous said:

The funny thing is that they don't have one of these stores in the Seattle area.

The link Alex posted shows one in University Village. It's at the very bottom.

Posted by Aviar

I really hope this does not succeed. Not because I don't like the Xbox, I bought my system on launch day and have really enjoyed the 360 during its life cycle. But I really do not want to see this as how they sell their next console. I do not need another $15.00 recurring bill. I have enough of these already, and I just don't want another one.

My guess is though, that they may offer a subsidized and non-subsidized version with the next console.

Posted by Napalm

@handsomeb said:

@Doctorchimp said:

But even then if they don't have the money to pay a few hundred upfront, then maybe they should save up some so they aren't hemorrhaging an extra hundred over the course of a couple years. It's a bad purchase for all people.

You just described the world economy. Pay more than retail over time to get what you want right now.

Err... you literally just made up that phrase.

Posted by Zaxex

While it's not the sort of thing I'd use myself I don't think it's that bad an idea.

Sure, it costs more after the two years than if you'd bought it all upfront, but relatively low interest as an alternative to forking out all that cash at once isn't the worst idea ever. I've got all the stuff they're selling and I'd wince at buying them all at once even now.

Of course it'll lead to people who can't afford them buying them regardless, but that's how all loans and subscriptions seem to work. And, unless I'm missing some basic logic, isn't money later worth less than money now? Considering income and all.

Posted by Humanity

This is an ok plan for people that can spare an extra $15 a month but can't cough up that much coin at once - younger people basically I suppose. Sure it sucks that you pay more in the end but thats how these sort of things work. When you take out a loan you always pay back more than the amount you borrowed because thats business. Even if this succeeds amazingly you will always have a non subscription way to purchase your console retail. Always. Stop freaking out.

Posted by Shaunage

This honestly seems like them setting a precedent for the next console. They want us used to it.

Posted by TyCobb

For Christ's sake. How can there be that many people shocked it costs more than buying it out right? You basically took out a loan to buy an Xbox. Of course it is going to cost more. It takes a year of payments to make up the cost of the console.

Down Payment ($99) + 1 year of payments ($180) = Current Xbox/Kinect Bundle Price.

The 2nd year of payments is Microsoft profiting for lending you money for an entire year. This is no different than buying anything else over time. I am just so shocked that people don't understand that this route costs more. I mean really, what the fuck.

Posted by TyCobb

@Humanity said:

This is an ok plan for people that can spare an extra $15 a month but can't cough up that much coin at once - younger people basically I suppose. Sure it sucks that you pay more in the end but thats how these sort of things work. When you take out a loan you always pay back more than the amount you borrowed because thats business. Even if this succeeds amazingly you will always have a non subscription way to purchase your console retail. Always. Stop freaking out.

Exactly

Posted by TorMasturba

@notdavid said:

I'm thoroughly confused by this system. Do you keep it after the two years are up? What happens if you stop paying?

As Alex said, it's like a phone contract, you pay over the long term, then once that term is up you own the phone flat out and the bill goes down a little bit because your payment for the phone, and a little bit extra since you didn't pay for the phone up front, has been paid off. All you're paying for after that is the service charge for making calls, texting and using the internet on it.

This's why once the payments for the phone are up you suddenly start getting calls from your service provider asking you if you want an upgrade on your current perfectly good working phone that has yet to let you down, appealing to our desires to have the latest shiny gadget so they can have more of your money.

In a console's case, after the long term payments are up, you'll own the console and only have to continue to pay for Xbox live if you so choose.

It's a good system for people who can't afford the full price of a console at the same time as having other bills that're rather hefty too, only good if you can garaunteed pay every payment, but who can garauntee that in this day and age?

I don't like paying for things this way myself because, as I've learned the hard way, they usually bite you in the ass later on when you're given a surprise redundancy package because the economy sucks and you've still got to carry on paying even though you're on the dole. (I luckily found a job shortly after, but the principle is the same.)

I paid for my Iphone4, in total, up front. They did seem confused at why I was doing this and tried to convince me that having a contract was cheaper but they gave up when they knew I wouldn't allow them to guide me down the wrong way.

My phone still works fine all these months later, my monthly phone contract is significantly cheaper than everyone elses and I take much more care of it because I own it up front. 18 months and my phone still doesn't have a scratch on it.

Anyway, I don't see the point in getting this 2 year xbox 360 contract, the next generation of consoles will very likely be coming by the time one of those years has passed. And I'm guessing that they'll be offering contracts for the next Xbox all over the place when it does release, these areas with the microsoft store are just the test zones for MS's future knowledge to see if it will be worthwhile, and I'm also guessing that those people who did take out this contract, a significant amount of them will want to cancel their current contract, have to pay the early closure fees and then start a whole new contract up on the next one. So that they'll be set back even more money. Avoid at all costs.

Edited by MindChamber
The subscription fee for the contract is $14.99 per-month, which roughly amounts to just under a hundred dollars more than you'd pay for all of the included Xbox stuff up-front.

4gig xbox with kinect is 300 bucks+120 for live= 420

the subscription one is 99 for the system plus15 bucks a month( 360)= 459

39 bucks is a lot less than just under a 100 bucks. or am I missing something. either way 39 bucks more aint so bad if you dont have the money to drop 360 upfront

Posted by GoofyGoober

Microsoft has its own stores? Thats the real surprise to me here. To me it is a stupid deal, maybe they are just trying to "test the waters" so to speak with it. Other than that I have no clue what use this serves.

Posted by Hurricrane

Fuck you and your increasingly insane money grubbing ways microsoft. THE CONSOLE SHOULD BE $99 A YEAR AGO

Posted by ptys

Kind of late considering every gaming journalist seems to be under embargo about the next PlayStation being announced at E3. I wonder if this has something to do with what Apple is planning with their TV or the like?

Posted by Spitznock

Considering you're paying $15/month for gold with this subscription plan instead of the 5 bucks a month you would be if you subscribed otherwise (prepaid cards are 60 bucks for a year), and you only get a 4 gig HDD (so you're going to need to get that thing replaced asap), I personally fail to see the appeal in this bundle.

Posted by Nicky92

If the overall complete price for the Xbox 360, Kinect and Xbox live Gold Membership is more than buying everything straight away from a store then why would you go ahead and do this crap subscription. If the deal was overall cheaper then yes, defiantly is a great deal but when the deal shows your actually paying more overall then who's daft enough to go ahead and give them their bank details. If people think that this will save them money in the long run because they are paying for the equipment through short payments monthly, then your missing the major point which is your paying more in the long run.

Posted by Dany

Its only at microsoft stores and hte fact they are not offering premium videos makes this more pointless.

Posted by umdesch4

You'd think most of the people in this thread had never seen a mortgage...

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