Microsoft May Be Preparing $99 Subsidized Xbox 360

Who want to be stuck on the xbox for the next 2 years if the new consoles will probably hit before that?

@mnzy: One day users like you will learn how to read the entire article instead of reading the headline and racing to post a comment. You're also assuming everyone that is getting an Xbox is a fucking dork like us and searching for video game deals constantly.

Also, giving more options to the consumer is never a bad thing. Everyone "in the know" will realize they can get this bundle cheaper, but those who don't have a vested interest in video games or those that don't have as much expendable income will finally be able to upgrade from their PS2's.

more options for the consumer is never a bad thing. the price seems to be ok. i have seen a lot worse deals to be made by buying a product with a "data plan"

@CheapPoison: Well, me for one. I'd be perfectly fine with the current consoles for at LEAST two more years.

The only thing they need to do to sweeten the deal is add a couple free downloadables a month, like what Sony do with their premium subscriber service. The value in that so far has been pretty damned good.

The last thing I need is another subscription.

I gotta laugh at this. It makes sense for MS, and MS only. It's a cynical ploy to bind people to a plan where they'll be paying monthly for obsolete hardware for a year, probably risking late fees and all other goodies that typically come with these schemes.
 
You can try and rationalize it any way you want, but if you can't afford a console off the shelf today, you have bigger problems than not owning a console, like perhaps food and shelter?
 
Did we suddenly forget that the games are ~$60, or will you tell me that this is for people who only play indies, or perhaps for those who waited till EOL so they can finally play through the backlog?

Isn't this the same as buying a 360 with a credit card and working out a payment plan?

@ahaisthisourchance said:

Gold is a fucking joke. I really hope Sony and Nintendo don't follow Microsoft's example next next gen.

Sony Plus is already the beginnings of that. While it is shitty for us as consumers, it is a great business model for the console manufacturers. Just like Giant Bombs premium memberships they can lock a lot of 'premium' content behind cash doors and that gets people hooked even when they don't necessarily even play games over Live.

It's actually not a bad deal. A 360 + Kinect is $300. 2 years of Xbox live is $120. That's $420. In this deal you're paying $100 at the start and $15 a month - that only comes to $460 in total. You're paying $40 more. If you were to get a $420 loan over 2 years, you'd end up paying back far more than $460.

No thanks I just got a new one. I'm also not an idiot!

@BootlessDragoon said:

@mnzy: One day users like you will learn how to read the entire article instead of reading the headline and racing to post a comment. You're also assuming everyone that is getting an Xbox is a fucking dork like us and searching for video game deals constantly.

Also, giving more options to the consumer is never a bad thing. Everyone "in the know" will realize they can get this bundle cheaper, but those who don't have a vested interest in video games or those that don't have as much expendable income will finally be able to upgrade from their PS2's.

Right, somebody who couldn't afford a 360 by now should totally make a deal that'll cost him more in the end. That's what's wrong with people today.

And I did read the article, you didn't really tell me where I was wrong, did you?

Also, I didn't know you guys pay $60/year for Gold. I pay about 30€/y.

Ugh.

Really, right at the end of the console cycle? Give or take a year....

This makes some sense, people who aren't already gamers might balk at spending a large sum up front, and this might seem more manageable; especially for kids, or more accurately, their parents.

@KaneRobot: As someone who plays Skyrim on a highend pc with visual mods. YOUR FUCKING CRAZY!!!

@eloj: A statement like that sounds like it comes from someone who has no business offering financial advice. Saying that people who can't afford a new console off the shelf have "no business" buying it is idiotic. Just because someone cannot afford to drop $400 in one fell swoop does not mean that they cannot afford $15 a month.

I pay all of my own bills, have a mortgage, and have a kid. I manage to continue gaming by waiting until games have been out for a while and searching for price drops. I am not struggling for money, but finances are a balancing act. A $400 purchase is nearly a third of my mortgage payment and it would lead to too much spending overall for the month - but that DOES NOT mean that I have "no business" owning a console or acquiring one by this method. It is much easier to budget $15 than it is to budget hundreds.

Now, granted - the timing of this deal is stupid, given that we are nearing the end of this console cycle, but were this offered two years ago (or were Microsoft to offer a similar plan for the next Xbox) it would be a great option for many people.

@FreakAche: some ppl cant afford all that money upfront.... thats why its an apealing deal to ppl that could afford 15 a month but coul

dnt afford ut all up front you obviously come from a comfortable back ground if you dont get how that works for some people

This sounds like a good idea, and I expect it will entice a different set of consumers who haven't yet picked up a 360. I'll be interested to see if they market the streaming services and movie marketplace more heavily than they have in the past. It would also be an attractive option for me when the next console is released.

@Brewmaster_Andy said:

@eloj: A statement like that sounds like it comes from someone who has no business offering financial advice. Saying that people who can't afford a new console off the shelf have "no business" buying it is idiotic. Just because someone cannot afford to drop $400 in one fell swoop does not mean that they cannot afford $15 a month.

I pay all of my own bills, have a mortgage, and have a kid. I manage to continue gaming by waiting until games have been out for a while and searching for price drops. I am not struggling for money, but finances are a balancing act. A $400 purchase is nearly a third of my mortgage payment and it would lead to too much spending overall for the month - but that DOES NOT mean that I have "no business" owning a console or acquiring one by this method. It is much easier to budget $15 than it is to budget hundreds.

Now, granted - the timing of this deal is stupid, given that we are nearing the end of this console cycle, but were this offered two years ago (or were Microsoft to offer a similar plan for the next Xbox) it would be a great option for many people.

I am in almost the same situation as you. But you seem to fail to realize that you could save up that money and THEN buy a console. You should always save up some money for when the time comes and you want to do something with it. You know, that is called responsible economy and the bank really entice you to save a bit every month,(at least here) because you know what? It gives security for you and the bank. And I can't imagine that the one who is thinking about buying a 360 now actually never thought about it before, so that means that they have had the chance to save up for it for many months (even years now). In fact, this deal wont be available for some time so my suggestion for all of you who maybe want to take part in this (CRAPPY) deal is to actually start saving NOW... and buy the damn thing when you can afford it (why not even a used one). Cheaper and better. That is what I did 2 years ago.

@Napalm said:

@SuperSambo said:

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

It's 2012...

I meant E3, and instead of this year, next year it will be revealed.

I know that it has been said that only the Wii-U would be showing at this years, but I had hoped otherwise.

Another crazy thought: Is the XBox 360 even going to be "around" next year? Or is this the portent that this is more or less it for the 360?

stupid deal.

Now hold on, who needs to learn math here? People are complaining about the total cost of the console + subscription, but compared to getting it all separately, it isn't that far off at all!

A new 360 will cost you from $150 to $250 depending on storage size. A Kinect is another $150. And two years of Xbox Live is $120. Adding up to at least $420, give or take depending on whether you can find below MSRP.

This subsidized bundle is $100 + $15*24 months = $460 total.

In the end it's just like a payment plan. Trade the immediate cost for more manageable monthly payments, at a slightly higher overall cost (about 10% difference). Anyway, either way you're gonna spend a whole bunch of money on software, so...

Yeah, two years of Gold at the least is $80 (on sale quite often.) And the top of the line hard drive with Kinect bundle is what, $399? So it's close.

@Majkiboy said:

@Brewmaster_Andy said:

@eloj: A statement like that sounds like it comes from someone who has no business offering financial advice. Saying that people who can't afford a new console off the shelf have "no business" buying it is idiotic. Just because someone cannot afford to drop $400 in one fell swoop does not mean that they cannot afford $15 a month.

I pay all of my own bills, have a mortgage, and have a kid. I manage to continue gaming by waiting until games have been out for a while and searching for price drops. I am not struggling for money, but finances are a balancing act. A $400 purchase is nearly a third of my mortgage payment and it would lead to too much spending overall for the month - but that DOES NOT mean that I have "no business" owning a console or acquiring one by this method. It is much easier to budget $15 than it is to budget hundreds.

Now, granted - the timing of this deal is stupid, given that we are nearing the end of this console cycle, but were this offered two years ago (or were Microsoft to offer a similar plan for the next Xbox) it would be a great option for many people.

I am in almost the same situation as you. But you seem to fail to realize that you could save up that money and THEN buy a console. You should always save up some money for when the time comes and you want to do something with it. You know, that is called responsible economy and the bank really entice you to save a bit every month,(at least here) because you know what? It gives security for you and the bank. And I can't imagine that the one who is thinking about buying a 360 now actually never thought about it before, so that means that they have had the chance to save up for it for many months (even years now). In fact, this deal wont be available for some time so my suggestion for all of you who maybe want to take part in this (CRAPPY) deal is to actually start saving NOW... and buy the damn thing when you can afford it (why not even a used one). Cheaper and better. That is what I did 2 years ago.

I don't fail to realize this at all. I am fully knowledgeable of how saving money works, and I have multiple savings accounts with different contributions for different purposes.

Forget for a second the fact that the console cycle is near its end, and take this into consideration. Let's say I budgeted $15 a month, the same as I would be spending were I to take this deal. To save up $300 (that's the $400 - the $99 up front cost) it would take 20 months. That's nearly two years. Two years that I would NOT have the console or be playing the console. The price difference between this deal and retail cost is only around $40. Over TWO YEARS. That's a cup of coffee a month. So if I know I will be playing this console two years from now, and I can get it NOW and spend $15 a month, how is that a CRAPPY deal? This is not like buying a car, where your loan amount is hugely more expensive due to interest. It is $20 a year. It makes MORE SENSE for plenty of people.

@Majkiboy said:

@Brewmaster_Andy said:

@eloj: A statement like that sounds like it comes from someone who has no business offering financial advice. Saying that people who can't afford a new console off the shelf have "no business" buying it is idiotic. Just because someone cannot afford to drop $400 in one fell swoop does not mean that they cannot afford $15 a month.

I pay all of my own bills, have a mortgage, and have a kid. I manage to continue gaming by waiting until games have been out for a while and searching for price drops. I am not struggling for money, but finances are a balancing act. A $400 purchase is nearly a third of my mortgage payment and it would lead to too much spending overall for the month - but that DOES NOT mean that I have "no business" owning a console or acquiring one by this method. It is much easier to budget $15 than it is to budget hundreds.

Now, granted - the timing of this deal is stupid, given that we are nearing the end of this console cycle, but were this offered two years ago (or were Microsoft to offer a similar plan for the next Xbox) it would be a great option for many people.

I am in almost the same situation as you. But you seem to fail to realize that you could save up that money and THEN buy a console. You should always save up some money for when the time comes and you want to do something with it. You know, that is called responsible economy and the bank really entice you to save a bit every month,(at least here) because you know what? It gives security for you and the bank. And I can't imagine that the one who is thinking about buying a 360 now actually never thought about it before, so that means that they have had the chance to save up for it for many months (even years now). In fact, this deal wont be available for some time so my suggestion for all of you who maybe want to take part in this (CRAPPY) deal is to actually start saving NOW... and buy the damn thing when you can afford it (why not even a used one). Cheaper and better. That is what I did 2 years ago.

If you can afford to save up 420 dollars you can afford 40 extra dollars over the course of 2 years.

No thank you.

Subsidized Xboxes?! Goddamn waste of taxpayers dollars!

Sounds cool... but what if they launch the new Xbox and you are stuck in this contract.

This was mentioned on CVG in which they stated the Hard drive size which Patricks report doesn't, the size is only 4GB which is no space at all so you would have to purchase a much bigger HDD drive on top of the cost, might not seem that great of an offer now but i guess some may still go for it regardless.

Isn't this the same as buying a 360 with a credit card and working out a payment plan?

‎So, Microsoft will release a $99 Xbox 360 Kinect bundle, with the low price offset by a two-year Xbox Live subscription fee of $15 per month...

[Simple math] $15 x 24 months = $360

What "level of hell" did the executive who came up with that idea come from? So you spend $459 on a system yet in 18 months the NEW system is out. Wow, that is a BAD deal, and if you break the deal (because you lose your job) you get reamed with an early termination fee. Nice....really nice Microsoft.

@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.

Doesn't seem like an awful deal if you want all that stuff.

whats the early termination fee? whether or not I jump in depends on if selling the kinect will pay for the fee.

@NeoUltima said:

Subsidized Xboxes?! Goddamn waste of taxpayers dollars!

Yeah thanks a lot Obummer!

I hope they do something like this for the next generation. I was still in University when the 360 launched and had no problem dropping a wad of cash up front on a console then. Things. Have. Changed. I have more expendable income but also have kids now. It has draw backs bit I would prefer this.

Now, prepare yourselves... I'm about to do.... MATH!

This is a simple problem with a down payment of $99 at time = 0 following by a series of monthly, $15, annuities for 24 months. If we were given an interest rate, we could simply calculate the present worth of that series of payments, but alas, we do not have this so lets think about for a minute. What are we actually paying for here? We don't entirely know what this "subsidized" Xbox 360 package will include, but we can say that is might have a 4GB Xbox 360 (Best Buy Retail Price = $199). The 24 month plan should include Xbox Live Gold (Retail Price = $60/year, so for 24 months, that gives us $120 total value).

For this deal to be indeed a "deal" then the net present worth should be less than $199 + $120 = $319. We are still missing an interest rate. I went online and found common interest rates for credit cards to be around 20% APR, that's good enough. Unfortunately, APR = Annual Percentage Rate, not monthly percentage rate, so I need to convert 20% into an equivalent monthly interest rate. You may need to do a bit of research for this to make sense, but the equivalent monthly rate to an APR of 20% is... 1.2^(1/12) - 1 = 0.0153 or 1.53%.

Great, we have an interest rate, we have a payment plan. Let's NPW this shit. The present worth of a uniform series can be found here. I found the P/A for this = 19.96. Thus, the NPW of this payment plan is = $99 + (19.96)*($15) = $398.38

Well, you guys are right, this is not a "deal" per say, but it's not a terrible amount of interest, you are essentially paying $80 of interest over 2 years for the pleasure of enjoying an Xbox 360 with 2 years of Xbox Live. I've seen much worse payment plans out there for cars, dishwashers, couches, Pawn Stars...

Of course, I did not include tax or anything in this analysis. Hope that wasn't too long and boring. Of course, I'll try to answer questions.

@sleepykyle: The story is that this Xbox will include Kinect. So your numbers are off - add $100 bucks to your calculations. You end up paying an extra 40 bucks over two years. This is not a bad deal.

@Brewmaster_Andy said:

@sleepykyle: The story is that this Xbox will include Kinect. So your numbers are off - add $100 bucks to your calculations. You end up paying an extra 40 bucks over two years. This is not a bad deal.

Also it is said to include additional content. I can't imagine they would charge more and not include a better value, maybe Netflix, or hulu plus? Possibly a game service which would allow you access to older games or market place material that is sitting around not making money for them ( ie Playstation ). I can definitely see this being worth the price, especially if you are a person who would definitely be paying anyway.

This looks like a "pilot program" for a next-gen console pricing strategy. For example, if the price is prohibitive for the next xbox, they could price it $200 or more cheaper and have a subscription attached. No one would buy a $700 iPhone for cash, they're always attached to a two year phone contract. This price model could increase the amount of early adopters of new hardware, and combined with more royalties from more digital content (compared to original 360 launch) the initial launch losses could be drastically reduced.

@eloj: A statement like that sounds like it comes from someone who has no business offering financial advice. Saying that people who can't afford a new console off the shelf have "no business" buying it is idiotic. Just because someone cannot afford to drop $400 in one fell swoop does not mean that they cannot afford $15 a month.

I'll take one, also my name is rusty shackleford.

@eloj: That's not the point. How long the console is out doesn't even play into the argument - we need to look at the deal on its surface, dollar for dollar. And dollar for dollar, the cost is only an additional $40 over buying the console outright and paying for two years of Live. It's a good deal. The only bad part of the deal is how late in the console cycle it is arriving. OTHER THAN THAT it is a great deal.

Again, regardless, just because you can afford to make a large payment every five to seven years, many cannot. I can absolutely afford everything I need to provide for my family, enjoy my hobbies, and save for my future, but that hinges on affordable monthly spending. Tacking $400 on one month does not go along with that, but $15 a month does.

This IS a good deal and it has nothing to do with greedy "I want it now" attitudes.

@eloj: Missed your edit!

@mnzy said:

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

My thoughts exactly. The regular price for the 4GB version is $200. On top of $60 a year for Xbox Live, you're still paying a lot less.

For the people talking about cell phone companies that does the same thing, yes they do. However, the phones are significantly cheaper when on contract and you're still paying the same amount for the service.

I don't think the end of the cycle thing is a valid point against this deal at all. The people most likely to benefit from payment model are likely the same folks who will struggle to get in on launch day pricing for a console/games/accessories anyway. If history repeats the ps3/360 will still be viable for a while after the next round of consoles come out, and I'm sure there will be a few worth while games that trickle out after that as well, on top of that, these are the same people that generally have a back log of great old games to play because more often than not they don't buy new or wait for the price drops. If they're getting their first 360 now, regardless of new games coming out after the fact, you mean to tell me there isn't years worth of games in the library (that can be acquired cheaply) for them to play?

I think it's a good move, it's going to be interesting to see how it works out. Even for people like me with a good job, few responsibilities, and a spendy gaming habit, this sort of model would have resulted in far less bruises from the significant other the last time around, and if they offer it on the next round of consoles I'd more than likely get in on it.

(as an aside; trying to float the kinect installbase numbers?)