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Microsoft May Be Preparing $99 Subsidized Xbox 360

Two-year commitment would net an Xbox 360, Kinect, XBL Gold, and more.

If The Verge’s sources are correct, Microsoft may be close to launching an Xbox 360 priced at $99--as soon as next week.

Microsoft is apparently able to achieve such a low price by subsidizing the console through a two-year subscription.

The Verge tends to know what they’re talking about, so I’m willing to float this report, as it's a business model that makes sense.

The subscription would cost $15, and be paid out monthly. The bundle would also include Kinect, access to an Xbox Live Gold membership, and possibly other premium video services.

There would be a warranty covering the two years, and like other subsidization models, users could opt-out ahead of the two year mark by paying an early termination fee.

It’s a compelling idea. While I can’t tell you a source confirmed it to me, I’m inclined to believe it, even if we don't hear more until E3.

Patrick Klepek on Google+
238 Comments
Posted by patrickklepek

If The Verge’s sources are correct, Microsoft may be close to launching an Xbox 360 priced at $99--as soon as next week.

Microsoft is apparently able to achieve such a low price by subsidizing the console through a two-year subscription.

The Verge tends to know what they’re talking about, so I’m willing to float this report, as it's a business model that makes sense.

The subscription would cost $15, and be paid out monthly. The bundle would also include Kinect, access to an Xbox Live Gold membership, and possibly other premium video services.

There would be a warranty covering the two years, and like other subsidization models, users could opt-out ahead of the two year mark by paying an early termination fee.

It’s a compelling idea. While I can’t tell you a source confirmed it to me, I’m inclined to believe it, even if we don't hear more until E3.

Staff
Posted by Recall

Bit late

Posted by SuperSambo

2 years?

I guess 2013 is the date for the 720

Edited by MooseyMcMan

Sounds...strange to me.

Also, I like that taped on face.

Moderator
Posted by mnzy

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

Posted by Kasswara

Typo in the first line.

Posted by RockinKemosabe

I'm still rocking my 360 from '07!

Posted by Napalm

@SuperSambo said:

2 years? I guess 2013 is the date for the 720

It's 2012...

Posted by zombie2011

huh, like to see how this pans out for them.

Posted by Anwar

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

Just like all those phone contracts, but they work, because people don't think that stuff through.

Posted by Dagbiker

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

Yah it is if you have the money now, but what if your 12 and all you make is 15 dollars a month.

Posted by crusader8463

Live is a scam, and the math on this adds up to paying way too much. Will stick to the 360 I already have sitting in the corner collecting dust.

Posted by Xtrminatr

$15 a month for 2 years - $360. I see what you did there Microsoft!

Posted by nintendoeats

"While I can't tell you a source confirmed it to me"

This is your way of telling us that this happened, right?

Posted by zeekthegeek

Kudos for the price without the $99 downpayment: exactly $360. But yah, this would be a complete ripoff and anyone who falls for it would have to be a complete mark.

Posted by colubroid

I know phone sellers have been saying it forever; but, I still don't like the use of 'Subsidized' in the title. You don't have to pay full-price now, because it's magically 'subsidized' Microsoft will kindly allow you to pay more later.

Posted by Patman99

@Napalm said:

@SuperSambo said:

2 years? I guess 2013 is the date for the 720

It's 2012...

That's just what the government wants you to believe, man.

Edited by Winsord

Wait, so $15 a month attached to the $100 starting price for two years, so you're looking at $460 for two years? I'd hope those are reasonably compelling services, considering if you bought the Kinect bundle console for $300 and regular Xbox Live for two years, that'd still only be $420 to that $460. Guess it would fall on HDD size at that point though, as the 250GB HDD w/ Kinect is $400. It seems like the "premium video services" would be the same one any Xbox Gold members have access too.

The deal doesn't seem like it'd be awful, but just a bit off. I guess I get where they're coming from with this idea, with it being a bit easier to deal with a $100 up front cost rather than $300, but I'd be interested to know if this is something people would actually want over just getting it the normal way.

Online
Posted by Dany

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

Long term over 2 years, is that a lot? What if someone doesn't wnat to buckle down 450 bucks now?

Posted by Tylea002

It's not as shady as phone subscriptions - it's got gold built in. It's lower interest than a loan would be, so I don't see what the problem is. If you can't afford money up front, but can earn enough, it could be the better option.

Edited by Jazzycola

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

2 years of Xbox live gold MSRP is $120.00(59.99 per year). Xbox with kinect 299.99. 299.99+120.00 = 419.99(excluding taxes) not a great deal but still a better deal than most rent-to-own places.

Edit: If it is an xbox with a harddrive the price goes up $100. So $519.99

Posted by Veektarius

The problem is they never put the good hard drive in the reasonably priced Xboxes, even though that's crazy, because disk space is dirt cheap.

Posted by FinalDasa

Cool idea for sure.

Moderator Online
Posted by S0ndor

@Anwar said:

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

Just like all those phone contracts, but they work, because people don't think that stuff through.

I don't know what it costs in the US, but an Xbox+Kinect bundle with 2 12 month XBL Gold cards costs about that much in The Netherlands. Obviously this plan is a bit more expensive, but not offensively so.

Posted by mak_wikus

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.
Posted by Jayzilla

That's a terrible price. The next xbox could come out before that sub ends and you would be stuck paying $15 a month for a service no one uses anymore.

Posted by Kidavenger

How would they setup the $15 monthly plan? It doesn't seem likely that places like Walmart or any other big box store could set that up through their systems.

Posted by tourgen

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

no dude. IT'S BRILLIANT. It punishes people for being bad at math.

Posted by BlatantNinja23

@crusader8463: I have no issue paying for live each year

Posted by Jazzycola

@Kidavenger said:

How would they setup the $15 monthly plan? It doesn't seem likely that places like Walmart or any other big box store could set that up through their systems.

They can and would. All the big box stores sell cellphones and plans, this would be no different. Walmart/Target/Amazon just become middle-men. They sell you the hardware and make you sign the contract then they send the contract to Microsoft.

Posted by louiedog

Remember when they tried to sell low spec computers with shitty dialup using this model 10-12 years ago? It didn't work.

If they did this 2 years ago I could see the appeal. At this point it's just a kid crying because his mom and dad won't buy him a 720 while they're still making payments on the 360. Maybe they'll offer an upgrade path in 18 months. I'm sure there is some market. I just wonder how big it is.

Posted by specs

@Kidavenger: The same way they did when pc's were free or close to free if you subscribed to CompuServe for three years. For the moment though, the rumor says Microsoft stores.

Posted by Vigorousjammer

@Jazzycola said:

@Kidavenger said:

How would they setup the $15 monthly plan? It doesn't seem likely that places like Walmart or any other big box store could set that up through their systems.

They can and would. All the big box stores sell cellphones and plans, this would be no different. Walmart/Target/Amazon just become middle-men. They sell you the hardware and make you sign the contract then they send the contract to Microsoft.

I can tell you that Kmart does no such thing with cellphones.

Edited by MordeaniisChaos

The difference between this and cell phone plans is both are either at cost or cheaper. In this case, the prices would mean that you are paying extra for XBL, and a bit less for the 360, but in the long run more than you would if you just payed for the low end 360 and yearly XBL Gold. The point of these deals is to provide a complete discount so people who normally couldn't afford something will pay something and make use of the platform to contribute more money.

@Dagbiker said:

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

Yah it is if you have the money now, but what if your 12 and all you make is 15 dollars a month.

Then save up and keep the extra like $100 dollars so you can afford games sooner. More, actually, because you can get two years of gold and a 360 for about $300, not including taxes. This is way more, just spread out.

@Anwar said:

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

Just like all those phone contracts, but they work, because people don't think that stuff through.

You don't pay more for the subsidized phone contract though, it's just a lot because they require a certain tier, but that tier isn't more expensive than normal. Here, that is totally the case. Pretty sure even monthly XBL costs about 8 bucks a month, not, ya know, twice that.

Posted by Brewmaster_Andy

This is not a terrible deal. Yeah, it would be stupid to get in on this deal now, but realistically it's not a huge screwover. The total cost difference over two years is forty bucks. For me and I'm sure for a lot of people, that's a compelling deal - though I'm paying an extra $40 in the long run, it is MUCH easier for me to budget $15 a month and a $99 up-front cost than it is the full $300 cost for the console.

It's not about being bad at math, or even bad at finances - it's about a purchase price that a consumer is comfortable with. I see this less as a cell phone contract and more like a credit card. It's easier to put big purchases on a credit card and pay it off slower, despite the interest, than it is to pay upfront with cash. If it's a system that I know I am going to use (and were we not so close to the console cycle changeover, I would) then why not?

Anyone that says this is a bad deal doesn't understand the logistics of being an adult, maintaining a mortgage and bills and the cost of raising a child - and extra $40 over two years is less than $2 a month - and that's a much easier burden than $400+ in one fell swoop.

Posted by SomeDeliCook

Pretty good deal since you'd spend way more sending in your red ring Xbox and having to buy new ones.

I'm kidding, I know RROD is mostly killed off.

Posted by kennybaese

Mm, this seems like more money on the long term, but short term is makes it way more affordable. This is less compelling with the 360 than it would be with, say, a new XBox.

Posted by LumpOfCole
@Jayzilla

That's a terrible price. The next xbox could come out before that sub ends and you would be stuck paying $15 a month for a service no one uses anymore.

It's all part of Microsoft's plan: Introduce the Xbox Next at a subsidized price with a similar sort of contract, and then by buying it you "refresh" the contract to 2 years from the point of buying the new Xbox (similar to how AT&T; used to "refresh" iPhone subscriptions when upgrading from an older model).
Posted by FreakAche

Um... 15 dollars a month? So is this a new tier above Gold? I'm not sure about the future of Microsoft consoles. Presumably this has a lot to do with how they want to provide a premium video service/television substitute. However, I'm still not convinced of the viability of their goals here in Canada, which is less so their fault, and more the fault of the CRTC and their absurd content restrictions. So far Boxee seems like the most viable set-top box for people outside of the US, but even it's a bit iffy.

Posted by MormonWarrior

@mnzy said:

$15 for 24months and $99 for the box makes it $459. That's a terrible deal.

In accounting there's a thing called present value and future value. Basically a dollar now is worth a lot more than a dollar down the line in that you can use that dollar now (invest, purchase things, etc.). So in terms of present value, $99 and $15 add up to a lot less than $300 and $60 right now, even if down the line you end up paying more. More expensive in the long run doesn't mean it's a bad deal - you may have much more important alternate uses for that other money now but you can afford to pay piecemeal like that.

Wow look I actually applied something I learned in my courses. I guess that makes them useful.

Posted by RoivaS3ternal

at first i thought holy shit ima buy an xbox! then i read it and got all disappointed.

Posted by RVonE

Call me crazy, but I think 15USD is a bit steep. At that price point and with a two-year contract I'd say the console should be free (or very close to free).

Posted by Fuga

4 GB.

Posted by kgb0515

Hmm...what's the early termination fee then? That's where the cell phone providers usually nail you.

Posted by radioactivez0r

Maybe I'm not up to speed, but the last two "scoops" from The Verge were bullshit rumor-mongering, so how exactly are they a reliable source for stuff?

Posted by crusader8463

@BlatantNinja23: I do. I think it's a scam to force people to pay a fee to play your games online. If they want to charge for all the other crap fine, but not to play the game I just bought online.

Edited by TrashMustache

Your typical all too obvious marketing technique established in the hope that it will fool alot of people into thinking this is a good deal. It isn't, but people will buy it.

Marketing in a nut shell.

Then again It's people who buy it who are dumb, can't blame microsoft for trying to sell as much as they can before they move on to the next gen. People need to make informed purchases.

Posted by Rolyatkcinmai

@Jazzycola said:

@Kidavenger said:

How would they setup the $15 monthly plan? It doesn't seem likely that places like Walmart or any other big box store could set that up through their systems.

They can and would. All the big box stores sell cellphones and plans, this would be no different. Walmart/Target/Amazon just become middle-men. They sell you the hardware and make you sign the contract then they send the contract to Microsoft.

This is a Microsoft Store exclusive, so no.

Posted by ExplodeMode

If you planned on paying for live anyway, and it was included with this fee then it's a pretty normal price. The hook to this deal is essentially being locked into paying for live for two years.

Posted by SilenceUK

@FreakAche: you didnt even fully read it did you...... the 15 a month covers the cost of the console as well as the gold membership its not better than gold in fact the way its worded it sounds like it could have less access to things like netflix