Microsoft May Be Preparing $99 Subsidized Xbox 360

Controller Housing Faceplate Shell Case Button for Xbox 360, so hot, so cool.http://x.vu/253392

You know I'd be interested in something like this for the NEXT Xbox, not this one.

Noone should spend anything on a console with no games to be honest.

SuperSambo
on May 2, 2012 at 3:54 p.m.
2 years?
I guess 2013 is the date for the 720

Math, how does it work!?

@sins_of_mosin said:

@drewmaw said:

@raikoh05 said:

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

I'm sure they've thought through all the hair-brained schemes gamers could ponder. I'm willing to bet that if you stop paying, it disables the console. Furthermore, this version xbox won't be able to even boot up without being conntected to the internet, insomuch that the console will phone-home before booting, informing Microsoft HQ that it is or is not a legitimately paying customer. If not, the console will not be allowed to boot. The kinect will also more than likely be tethered to that specific console, and will not work without that SPECIFIC console.

Haha wow you are nuts. There is no reason to do all that. If a person stops paying, they will get a bill for the remaining balance. If they don't pay, they'll end up with a collections notice and if they ignore that, their credit will be shot for many years. I'm sure the profile they created with the Gold will be disabled so you simply make a new one. Either way, you get a 360 and MS gets their money one way or another.

Microsoft isn't in the business of "scoring collections" from countless people who never fully pay for their 360's. Microsoft isn't dumb. They want to make money, not lose it. If people stop paying, then the xbox is disabled (and I'm sure collections will be sent out as well). The impetus to have continuous paying customers is obvious.

@raikoh05 said:

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

I'm sure they've thought through all the hair-brained schemes gamers could ponder. I'm willing to bet that if you stop paying, it disables the console. Furthermore, this version xbox won't be able to even boot up without being conntected to the internet, insomuch that the console will phone-home before booting, informing Microsoft HQ that it is or is not a legitimately paying customer. If not, the console will not be allowed to boot. The kinect will also more than likely be tethered to that specific console, and will not work without that SPECIFIC console.

Are you fucking for reals, Patrick? What sense does it make to sell a console for $99 with a $15 recurring charge, when the person who cannot afford $150 or $300 or whatever to pay the full ouright price for the console can't afford the $60 games to play on it? Microsoft wants people to buy games, not hardware. Do you think that they would really want to go after the 10-30% of the people for the rest of the money when their paycheck needs to go to groceries or tuition instead of that $15 monthly fee? Dumbest idea I've heard in a long time, and I can't believe you found it even remotely plausible.

@ThePhilanthropist said:

They need to just drop the price of the console versus looking for a new way to get more money out of there customers with predatory pricing schemes. Also how are they going to enforce the $15/month subscription fee?

Subsidized is the wrong word for what's going on here.

It makes sense that it would basically be like any subscription service. If you cancel or terminate service you get billed for the full value of the console.

A new 250GB Xbox 360 Slim with Kinect cost about $300. The two year subscription (if both are paid with the $60 1 year voucher) is $120 ( or $160 if paying with the 3 month vouchers) so that's about $420-$460. This equals about $460. It's actually a pretty bad deal because it costs about the same for a lot less memory.

I'd say if you pay sales tax, that makes this less of a bad deal. Ignoring that tying into the 360 is not the best move. Where I live sales tax is 9.1%.

299.99 *1.091 + 59.99*2 = $447.27

The Microsoft deal is:

99 * 1.091+ 15*24 = $468

That is $20.74, which is frankly a deal when you consider it spread out over 2 years. So at least in my town it isn't horrible. And this ignores any interest you'd earn by saving those monthly payments instead of buying up front. But it's all academic, as nobody who cares about money pays $60 for Live.

@Brewmaster_Andy said:

@pw2566ch: It's not much more expensive - it's only another $40 bucks over two years. The main point is that it is much easier for many to spend $99 and pay for the rest over time than to spend $300 up front.

In cases like this though, it's not necessary. If I buy a video game console, I'm going to want to expect it to be paid off without having to worry about an early termination fee. So it may be a tad more expensive, but it's a retarded plan.

@sleepykyle said:

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

yadda yadda yadda

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.

That was helpful. The only issue I would raise would be, In two years when you are free and clear of the contract where are you? We cannot know for sure, but the best guess is that by Oct 2014 the next systems will be out. The question is "Do people really get a deal from a device that is two years from obsolescence at that price?" That answer would vary from person to person, and will change even more after late Nov 2012 when Holiday sales prices start appearing. I woudl say teh price of XB360 and PS3 will drop by $30 to $50 come the holiday season

They need to just drop the price of the console versus looking for a new way to get more money out of there customers with predatory pricing schemes. Also how are they going to enforce the $15/month subscription fee?

Subsidized is the wrong word for what's going on here.

@pw2566ch: It's not much more expensive - it's only another $40 bucks over two years. The main point is that it is much easier for many to spend $99 and pay for the rest over time than to spend $300 up front.

@Brewmaster_Andy said:

@pw2566ch: Why? How is spending $300 in one fell swoop better than $15 a month?

When you add it up in the long run, it is still cheaper. It's the 2 year agreement that make it that much more expensive.

@Bruce said:

@pw2566ch:

What if you can't afford the four hundred up front, but can afford the ninety-nine dollars and the monthly payments? Basic Rent-A-Center, lease to own mentality.

Four hundred dollars is a lot of money for most people to just spend in one go.

It's not $400 for the model they're offering, it's $300. Even then It's still worth it to raise another $100 just to get the 4GB Xbox 360 for $200. I mean, at first I thought this was a good idea for people that want a newer console, but there are still cheaper alternatives instead of paying $15 a month. Hell, Gamestop has a used Xbox 360 going for $130. And I'm sure there are people selling them for $100 on Craigslist.

@pw2566ch: Why? How is spending $300 in one fell swoop better than $15 a month?

@drewmaw said:

@raikoh05 said:

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

I'm sure they've thought through all the hair-brained schemes gamers could ponder. I'm willing to bet that if you stop paying, it disables the console. Furthermore, this version xbox won't be able to even boot up without being conntected to the internet, insomuch that the console will phone-home before booting, informing Microsoft HQ that it is or is not a legitimately paying customer. If not, the console will not be allowed to boot. The kinect will also more than likely be tethered to that specific console, and will not work without that SPECIFIC console.

Are you saying Xbox Slims will not work unless you have an internet connection for it? That's an extremely off-putting reason for me to buy one, if that's true.

@pw2566ch:

What if you can't afford the four hundred up front, but can afford the ninety-nine dollars and the monthly payments? Basic Rent-A-Center, lease to own mentality.

Four hundred dollars is a lot of money for most people to just spend in one go.

I don't see who would take advantage of this. Why not just a price-drop!

@Brewmaster_Andy said:

@pw2566ch: Don't forget the Kinect - that makes the base price $300, plus two years of Live at $120 = $420. Not far off from $459.

Aw... ok. Well, even with the extra $40, you're still better off buying the console itself for $300 instead of coughing up $15 a month.

@mnzy: I'm not saying that its the best deal, but the gaming community is making it sound like a lot worse than it is. Yeah, XBL cards are $60 MSRP, but Amazon usually ends up selling them for $35.

I actually like the sounds of a model like this and think it could work for the next XBox. It would all have to balance out, but the Zune on XBox susbcription is great. I'd love games to be factored into that too. I've got way too many games taking up space in my son's nursery at the moment. A full DD service with a monthly payment structure would be very appealing.

At the end of the day it would be a much better way to get software attach rates up. People who would buy a lot of games would benefit and people who don't buy a lot of games commit to spending more than they usually would. If they got the pricing right it would all balance out. Production costs would be down as it would all be download service so there's theoretically more money for publishers. It destroys the used game market also.

And don't say it wouldn't work. It's more or less the same delivery system as iTunes, just on a monthly payment system.

If this is true, they will sell a buttload of 360s.

Looks like the 160GB PS3 with a Move controller is about 300 before taxes, over 350 if you buy the 320GB bundle ... at least in the BestBuy cart, not sure about any other accessories that would make the comparison, and not being a PS3 owner, can't attest to having the network info, not sure how the wallet works for network transactions . Otherwise, it falls back to where does a buyer feel they'll get the most bang for their buck, the content, the network, and their sphere of friends/competitors.

This is no different than everything else just like this. You pay more in the long run in order to pay less now because you're poor. Fuck, even people with money do it with houses and cars.

Hmmm... that's actually pretty smart. Surprised no one has done it sooner.

@mnzy said:

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

i'm pretty sure a 360 alone doesn't cost more than 99 to make and kinect is useless, MS is not being generous here, not a single bit.

@darkdragonmage99: Really 600 dollar PS3s? Come on man....

Lmao... No.

@raikoh05 said:

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

I'm sure they've thought through all the hair-brained schemes gamers could ponder. I'm willing to bet that if you stop paying, it disables the console. Furthermore, this version xbox won't be able to even boot up without being conntected to the internet, insomuch that the console will phone-home before booting, informing Microsoft HQ that it is or is not a legitimately paying customer. If not, the console will not be allowed to boot. The kinect will also more than likely be tethered to that specific console, and will not work without that SPECIFIC console.

People appear to not be understanding the additional cost. This may not be a great deal overall but for some people on a fixed or low income this may be the only chance they have to buy one of these new in box. Sure it sucks that you pay more but thats the fee you pay for being able to get the product today and pay for it later. The same sales practice happens for just about all consumer goods.

This isnt a big deal and its certainly not a rip off or a scam.

@darkdragonmage99 said:

I'm getting tired of hearing this is a bad deal especially from people who own a ps3 you know a 600 dollar console.

It's not 2007 anymore.

@pw2566ch: Don't forget the Kinect - that makes the base price $300, plus two years of Live at $120 = $420. Not far off from $459.

@darkdragonmage99 said:

I'm getting tired of hearing this is a bad deal especially from people who own a ps3 you know a 600 dollar console. paying 50 bucks more so you don't have to puny up the money up front could let more people own these overly prices consoles. Which means more money for Microsoft and a larger install base which means more games for everybody. Yes I said overly priced the xbox 360 and ps3 are overly priced

Where are you buying 600 dollar PS3s?

I'm getting tired of hearing this is a bad deal especially from people who own a ps3 you know a 600 dollar console. 
 
paying 50 bucks more so you don't have to puny up the money up front could  let more people own these overly prices consoles. Which means more money for Microsoft and a larger install base which means more games for everybody.  
 
Yes I said overly priced the xbox 360 and ps3 are overly priced  

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?)

@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.

@eloj: Missed your edit!

@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.

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

@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.

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.

@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.

@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.

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.

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.

@NeoUltima said:

Subsidized Xboxes?! Goddamn waste of taxpayers dollars!

Yeah thanks a lot Obummer!