Giant Bomb News

148 Comments

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+
148 Comments
  • 148 results
  • 1
  • 2
  • 3
Posted by Example1013

how big is the hard drive?

Posted by sofakingcool

weird

Posted by devilzrule27

@onan said:

@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.)

When you factor in the cost to run a store in NY, the rents in Manhattan are ridiculous, the profits look less appealing. And the rich people in New York do their shopping across the river in NJ because the sales tax is a fraction of that in NY. NJ thrives on shopping money. The one store is in Monmouth County, the 56th richest in the country, the other is in Somerset which is the 11th richest in the country and they are both surrounded by several counties that are also in the top 100 richest counties, of all 3,000+ that there are in the US. The NY dollar isn't more lucrative. There's more money to be had in NJ.

Posted by Pathos

You're not@BlownSpeakers It's not a rent contract. You pay the 99 dollars upfront and after two years (or payment of the early termination fee) you own the console. I think it works out to be $460 versus $420 if you purchased an equivalent bundle (according to another article) . :)

Posted by PandaShake

The upfront cost is appealing, but would you really want a kinect?

Posted by hughesman

If this business model is used for the next-gen and it includes a warranty on the system i might actually go for it. Unless of course a warranty+system retail equals significantly less over time. but being in a contract, wouldn't they have to at least repair you system?

Posted by msavo

If you can't buy a 360 in full and go with this plan you need to sit down and reevaluate your finances.

Edited by Xtrminatr

@benitobb said:

They are actually just opening up a Microsoft store in my shitty mall I'm an Abercrombie manager at in central Jersey. Not far from the Apple store in the same mall. Don't know how well this deal or actual store will do though.

Freehold? That fucking mall has everything.

Edit: Or bridgewater?

Posted by KontX

They must think we're really stupid or they're catering to the "food stamp" demographic.

Posted by HuperNikao

I'd love to see a repoman ep. just for xboxs.

Posted by onan

@devilzrule27 said:

@onan said:

@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.)

When you factor in the cost to run a store in NY, the rents in Manhattan are ridiculous, the profits look less appealing. And the rich people in New York do their shopping across the river in NJ because the sales tax is a fraction of that in NY. NJ thrives on shopping money. The one store is in Monmouth County, the 56th richest in the country, the other is in Somerset which is the 11th richest in the country and they are both surrounded by several counties that are also in the top 100 richest counties, of all 3,000+ that there are in the US. The NY dollar isn't more lucrative. There's more money to be had in NJ.

What criteria are they using?

Actually, it doesn't really matter. Monmouth County has about 631,000 inhabitants. New York City has over 8 million inhabitants, which is just slightly less than the entire population of New Jersey. That's why companies put flagship stores there. It's insane that, even as a loss leader, Microsoft doesn't have a shop there to increase their legitimacy as a prestige brand. Just look at what Apple did.

Posted by YukoAsho

1) Why do this now? We can theorize all we want about when the new consoles will come out, but this here suggests that MS might not be ready to pull the trigger. Just seems a desperate attempt to keep things going. Perhaps a snag in development of the new hardware?

2)I can't imagine many people doing this, especially when you can just pay retail price by going to Wal-Mart and doing layaway....

Posted by MmaFanQc

@umdesch4 said:

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

have YOU a hard time to manage YOUR budget?

Posted by Tackchevy

Smells like a test for a new revenue model similar to cell phone sales.

They obviously don't have the partnering opportunity that cell phone manufacturers have to get subsidies from service providers. Well, nothing that I can dream up right here on the spot. The next generation might have some in's and out's that would allow for such a thing, so who knows.

In any case, this is just like a zero interest three year loan. Maybe M$ could get into the business of financing some or all of their own products. After all, I imagine studies show that easy monthly payments can really lube up a consumer versus a rough $500 purchase price or whatever it ends up being for a next gen console. Financing is big business if they get into charging interest, fees, etc.... After all, before GM blew up, GMAC was a bigger part of the company than the actual automobile manufacturing.

Posted by devilzrule27

@onan said:

@devilzrule27 said:

@onan said:

@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.)

When you factor in the cost to run a store in NY, the rents in Manhattan are ridiculous, the profits look less appealing. And the rich people in New York do their shopping across the river in NJ because the sales tax is a fraction of that in NY. NJ thrives on shopping money. The one store is in Monmouth County, the 56th richest in the country, the other is in Somerset which is the 11th richest in the country and they are both surrounded by several counties that are also in the top 100 richest counties, of all 3,000+ that there are in the US. The NY dollar isn't more lucrative. There's more money to be had in NJ.

What criteria are they using?

Actually, it doesn't really matter. Monmouth County has about 631,000 inhabitants. New York City has over 8 million inhabitants, which is just slightly less than the entire population of New Jersey. That's why companies put flagship stores there. It's insane that, even as a loss leader, Microsoft doesn't have a shop there to increase their legitimacy as a prestige brand. Just look at what Apple did.

I had already said New Jersey gets a shit ton of shoppers from NY. I don't know if you know this but people here in NY and NJ are willing to cross state borders. It's pretty simple. Trains, cars, boats. whatever New Yorkers come to Jersey to shop. And they do it often. And the stores that do open in NY do so because they have the product lines to support it. A microsoft store in Manhattan couldn't survive selling PC's and a couple of phones. Just like Best Buy couldn't cut it in the Big Apple but no surprise they left all their NJ stores open despite the fact you can barely drive 10 minutes in north east Jersey without running into multiple stores. Hell Paramus has two best buys only minutes apart.

And the criteria is per capita income. Jersey has lots of rich people.

Speaking of Apple there is a reason they packed 11 stores into this tiny little state of New Jersey. Thats almost as many stores as NY has in it's entire state. And big shock two of them are in the same spot as the Microsoft stores.

Posted by onan

@devilzrule27 said:

@onan said:

@devilzrule27 said:

@onan said:

@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.)

When you factor in the cost to run a store in NY, the rents in Manhattan are ridiculous, the profits look less appealing. And the rich people in New York do their shopping across the river in NJ because the sales tax is a fraction of that in NY. NJ thrives on shopping money. The one store is in Monmouth County, the 56th richest in the country, the other is in Somerset which is the 11th richest in the country and they are both surrounded by several counties that are also in the top 100 richest counties, of all 3,000+ that there are in the US. The NY dollar isn't more lucrative. There's more money to be had in NJ.

What criteria are they using?

Actually, it doesn't really matter. Monmouth County has about 631,000 inhabitants. New York City has over 8 million inhabitants, which is just slightly less than the entire population of New Jersey. That's why companies put flagship stores there. It's insane that, even as a loss leader, Microsoft doesn't have a shop there to increase their legitimacy as a prestige brand. Just look at what Apple did.

I had already said New Jersey gets a shit ton of shoppers from NY. I don't know if you know this but people here in NY and NJ are willing to cross state borders. It's pretty simple. Trains, cars, boats. whatever New Yorkers come to Jersey to shop. And they do it often. And the stores that do open in NY do so because they have the product lines to support it. A microsoft store in Manhattan couldn't survive selling PC's and a couple of phones. Just like Best Buy couldn't cut it in the Big Apple but no surprise they left all their NJ stores open despite the fact you can barely drive 10 minutes in north east Jersey without running into multiple stores. Hell Paramus has two best buys only minutes apart.

And the criteria is per capita income. Jersey has lots of rich people.

Speaking of Apple there is a reason they packed 11 stores into this tiny little state of New Jersey. Thats almost as many stores as NY has in it's entire state. And big shock two of them are in the same spot as the Microsoft stores.

Wow, seriously? People don't go to Jersey to shop because it's where affluent people go, they go because some of the stores there offer a significant discount on certain items that makes the transportation fees and time spent worthwhile, and/or because the volume on purchases will be so high that the cost of the trip is negated with the savings from a lower tax rate.

I don't know if you know this, but NYC residents have by far the lowest rates of car ownership in the country. I don't know if you know this, but as a person who works in Times Square, I'm much more inclined to pop into the Toys R Us a block away from me than I am to cross state borders. But hey, thanks for the heads up on what I would do.

No idea what you're talking about with the Best Buy thing. You can't spit in NYC without hitting a Best Buy. I don't even live in Manhattan and I've still got one within walking distance.

You know what Jersey does have than NYC doesn't? Walmarts. I've never been in one personally, but I'm going to assume it's a high-end establishment serving an affluent clientele the way you're going on and on about how wealthy Jersey is. I'd probably head over to Jersey and visit one but I don't really need a car living here and the probably don't have anything there I can't find locally anyway. Plus, why would I want to go there? It's Jersey. Public opinion of the state in NYC is so low that they had to launch the following ad campaign to try to get people to come to New Jersey:

Posted by Jab1235

I don't understand why anyone would choose this option, it comes out being ~$40 then an xbox with 2 years of gold at msrp. Not to mention there are constantly deals on consoles and there is always a month where xbox live year cards seem to go on sale.

Posted by Kosayn

Look at Microsoft, double tapping the free gaming site ad. They definitely know promotion.

Posted by golguin

Call me crazy here, but if this is meant for people who can't afford a 360 upfront wouldn't it be a better deal to wait for the cheapest 360 package to drop below $199? If they can't wait then they could just buy the $199 model and be done with it instead of paying a total of $459 in 2 years. I wouldn't even bother with the Kinect if I was on such a tight budget as this deal seems to say, "Be able to play with the Kinect now and pay $459 later." This simply makes no sense.

Posted by Turambar

Wait, aren't XBL Gold memberships 5 dollars a month?  Or am I remembering wrong?

Posted by Calavero

I'd definately be interested in this plan if they used it for their next console. I just don't see how it can be succesful this late into the 360's life though.

Posted by jaks

What they are doing with this business model interests me a lot less than what they could be testing it for. I could see MS using this as a springboard for selling $199 launch consoles of the next Xbox with a 2 year service agreement and just fucking Sony up the ass on launch day with early adopters, most of whom probably have XBL anyway. Once the two years are up and most people are addicted to online games or the various TV content, they will just opt to keep paying anyway.

Like it or not, online gaming on PSN is generally a second rate experience. Most people associate gaming online with consoles with XBL. This will leave Sony scrambling to come up with their own pay service so they can implement a similar deal, or be stuck holding their junk again this generation with a console "$200 more expensive" than their competitors.

Posted by Jonnyflash80

$460 over 2 years for a 7-year old console (9-year old by the time the contract is up) does not sound like a good deal to me.

Posted by AnEternalEnigma

This is just a social test to see who out there is a fucking idiot.

Posted by Osiris

Lol this sounds like Blizzard throwing an Annual pass at people at the end of it's expansion to keep people playing...

Posted by FirebirdINF

@Tackchevy said:

Smells like a test for a new revenue model similar to cell phone sales.

They obviously don't have the partnering opportunity that cell phone manufacturers have to get subsidies from service providers. Well, nothing that I can dream up right here on the spot. The next generation might have some in's and out's that would allow for such a thing, so who knows.

In any case, this is just like a zero interest three year loan. Maybe M$ could get into the business of financing some or all of their own products. After all, I imagine studies show that easy monthly payments can really lube up a consumer versus a rough $500 purchase price or whatever it ends up being for a next gen console. Financing is big business if they get into charging interest, fees, etc.... After all, before GM blew up, GMAC was a bigger part of the company than the actual automobile manufacturing.

This. You have a good sense of smell, sir. Its a test.

MS has a lot of money to bank this and it could broaden the install base of NextBox instantly. Does this mean that it will cost $700 or $800?

Posted by 3eeve

Just want to make sure I understand this:

The contract for the hardware is $99, two years. The subscription for Xbox Live et al is $14.99/month, or roughly $360 over two years?

Wow. No thanks.

Posted by Corvak

If its that hard to save up $300 to get a game console, you probably should be spending money elsewhere.

This is just like those sketchy furniture deals where you don't have to pay for 18 months - looks good up front but it'll bite you in the ass once your 18 months are up and the interest works out to more than the cost of the furniture.

In the long run, you're still better off buying up-front, especially if you don't need a Kinect. (which I believe is most of us without kids.)

Posted by BBQBram

Seems like a bad deal. If I were to buy an Xbox now, I'd go for the 250 gig; don't need Kinect or the commitment to monthly gold membership. But I can see how it's an opportunity for people who can't muster up the dough all at once.

Posted by dropabombonit

Well at least this means that we won't have to hear about it at E3 but knowing Microsoft we still will

Posted by ChadBonin

I'm curious on how this will affect future console releases; I can't imagine this will actually affect Xbox 360 sales too much.

Could gaming be going the phone route, where you can spend extra for no-contract, or pay less for a subsidized model?

Posted by BiG_Weasel

RRoD, now rent-to-own!

Posted by SpecDotSign

@louiedog said:

The Best Buy outlet has a refurb 250 GB slim right now for $150. If you don't have much cash right now buy that, get your free month of Gold when you register an account on the system, and then buy a year of Gold for $40 (if you even want it) when it goes on sale in the next 4-6 weeks as it often does. Add a used/sale Kinect for $100 or less when one becomes available, again only if you want it. It's a much better deal and you'll really be glad you have that hard drive. I wouldn't worry about the refurb's 90 day warranty aspect. With the heating problem solved if anything goes wrong it's likely to be in the first month or after a few years.

Hmm. I think I may jump on this. My 60GB 360 died last summer and I've missed out on all those great XBLA games (the only reason I owned a 360 in the first place). Thanks for the tip!

Posted by FiestaUnicorn

@Alex said:

@Ravenlight: I refuse to believe that anyone who lives near Scottsdale, Arizona is anything but hyped for EVERYTHING.

People in Scottsdale are usually most hyped for drunk driving.

Posted by BlatantNinja23

It be kinda crazy if MS was testing this out to see if they wanted to do this for the "neXtBOX". If I only ended paying slightly more in the end because of a two year contract but was able to pay much less at launch it be tempting if I was tight on cash. Then again in a situation I was tight on cash I shouldn't be buying new consoles either I guess.

Posted by atombrain

@onan:

Having lived in NJ over 23 years I can say that there is nothing bad about NJ that isn't already bad about every other state. So simply demeaning NJ by saying "it's Jersey" or implying that NJ is trash for having Wal-Marts when that store exists EVERYWHERE doesn't validate your argument. Sure, "city people" don't have to go far to shop and it's easy not to have a car but that doesn't work for most people anywhere else. BTW, I'm 31 now and living in Ohio and there's a lot of people out here in the midwest who think just like you except they hate NY and NYC for the same BS reason you just gave, "It's NY", and just like you they never been there before.

Posted by onan

@atombrain said:

@onan:

Having lived in NJ over 23 years I can say that there is nothing bad about NJ that isn't already bad about every other state. So simply demeaning NJ by saying "it's Jersey" or implying that NJ is trash for having Wal-Marts when that store exists EVERYWHERE doesn't validate your argument. Sure, "city people" don't have to go far to shop and it's easy not to have a car but that doesn't work for most people anywhere else. BTW, I'm 31 now and living in Ohio and there's a lot of people out here in the midwest who think just like you except they hate NY and NYC for the same BS reason you just gave, "It's NY", and just like you they never been there before.

It might just be you're getting defensive because it's your home state, but all I was saying was New Yorkers have no desire to go to NJ if they can avoid it and MS is leaving money on the table by having 2 stores in NJ and none in NYC. The next guy said no, the New Yorkers with cash to burn always come to NJ to shop and they love it there, etc, but that's only fairly infrequently the case. New Yorkers have disdain for anything that's inconvenient for them, so they tend to talk smack about Jersey, or Staten Island. Also Queens people hate Brooklyn and Brooklyn people hate Queens.

We're honestly mostly indifferent to Jersey.

Posted by ajamafalous
@umdesch4 said:

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

Was about to say something along these lines. I don't mean to be rude or anything but I'm guessing many of the people screaming foul at this deal aren't old enough to have to balance their own budget.
 
 
You guys ever heard of credit cards? Loans? Car payments? Mortgages? Many people don't buy things outright when they purchase them because they don't have the ability to. You pay more over time because you can't afford to pay it all upfront. This is a basic financial transaction that happens daily.
Posted by Bell_End

@BiG_Weasel said:

RRoD, now rent-to-own!

careful with those RRoD jokes, they are antiques now

Posted by HerrVerkaufer

What's the worst that could happen? More intolerant assholes on Xbox Live?

Posted by Cefka

How to make this deal a huge success:

1, Xbox for free when getting a 2 year plan. (It means MS will make same amount of money as with normal pricing but they will sell many more units and games so total revenue will increase substantially)

2, Available at all retailers

With the current scheme, it is like they are just testing the model instead of going full out.

Edited by Supertom11

this was how the housing market crashed.

Posted by Enigma_2099

@gla55jAw: It involves making more money.

Posted by gla55jAw

@Enigma_2099 said:

@gla55jAw: It involves making more money.

They're just trying to get suckers who don't know anything about how much it will cost in the end. I don't think it's going to fool too many people.

Posted by RAMBO604

Who is this for? Honestly who? Even people on a budget or lower income have Xboxs already.

Posted by arcn

Say what you will about what Microsoft is trying to do here but please stop defending it with the "BUT BUT BUT POOR PEOPLE" excuse. They still have to dish out the same amount of money over time and if they can't keep up with the monthly payments they get hit with a 250 fee (it's less depending on how long you've been paying) when Microsoft cancels their account.

Posted by Vadis

Wow, they just put up signs for a new MS store in Boston too, weird. Regardless this deal is shit.

Posted by NautoAceOne

If they removed the 2 yrs. sub., then consumers really have a good reason to get the Xbox 360, and remove the Kinnect.