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[scoobs]

I think this is a super interesting pricing strategy. The subsidized price will attract a ton of consumers who don't think about the actual price of owning the machine (which is something ridiculous like $660 total), they only see the $299 up-front and think its a steal.

Very smart by Microsoft, I'm very curious to see how this works out

 

[Gorillaz]

yea that was just me throwing up a reason it could be always online, I don't own the 99 dollar version so I don't know how they deal with it.

 

[LittleJohnny]

You can buy XBL subsricption codes for cheap all over the Internet. There is no need for Microsoft points.

Right, but there's no guarantee that this will continue, it sounds like they're getting rid of this setup because of the loss in value. A $20 card sold for $10 doesn't make sense to them so you can expect the purchase of Xbox Live cards to go the same route.

 

[Grinchy]

The fact that Xbox live is a scam in itself and then the contract is a twisted knife.

That should written underneath the Xbox Live logo.

edit- wtf you edited that quick. I liked the original post better

 

[ThoughtsOfSpeaking]

I don't understand sorry. Why does that somehow invalidate anything?

It doesnt. Im simply pointing there will be no net benefit to consumers with this deal. All it is about is increasing profitabilty in the short term. Profits that they are losing out further down the line in the process.

The install base wont get significantly bigger because of this, it will not cause 3rd partys to make games exclusive and Sony wont be destroyed in NPDs because of it.

so *shrug*

 

[Vane_MagicCity]

Not really.

Xbox 720 Subsidized: $299 + $15 * 24 = $659
Xbox 720 Unsubsidized: $499 + $60 * 2 = $620


It's a terrible deal.

$40 over 2 years is not a big deal. It's one 3DS game in two years.

The real catch is that they will keep people subscribed to Live Gold. In a post PS+ world, Live Gold is a tough sell but on a new console it's even tougher. This locks poor people in.

 

[AgentP]

This is how just about any subsidised phone contract works. Reality check anybody?

From a bird's eye view yes, but there are differences that are important. Most people are not going to buy a phone and jump from carrier to carrier (in the US), so the $600 phone for $200 is not a bad deal. I cannot pay for my phone up front and save money over that two year period out of contract. It might be different in the EU.

Like many, I'd like to decide whether I want Live at any given time and be able to cancel. I never think to cancel my phone, I need it. I don't need Live, others offer the same service for free. I can't say that for cell service.

 

[Wynnebeck]

? So it's either pay full price or pay $15/mo subsidized like a damn cell phone? lol Yeah, looking more like after I'm done with my 360, I'm jumping out.

 

[Hawk269]

I think this is a super interesting pricing strategy. The subsidized price will attract a ton of consumers who don't think about the actual price of owning the machine (which is something ridiculous like $660 total), they only see the $299 up-front and think its a steal.

Very smart by Microsoft, I'm very curious to see how this works out

You said it better than I could. I have seen people at retail do exactly this and every once in a while one of them realizes that the long term cost is so much higher and they back out. But you hit on the head perfectly!

 

[ironcreed]

How did Microsoft get in a position where every single piece of news or speculation about their console is negative?

300$ with a contract is too expensive. Parents are going to get pissed by this, kids won't be able to pay it, and even the 20 somethings that can... why would you? You'd have to be retarded with PS3 sitting next to it, costing less. If you want to trojan horse your way into contracts you need a low price. Cell phones are a lot more important then 720 will be and they don't try to get 300$ from you for it because most people just won't pay that.

You make a good point. Hell, it might even make the Wii U look like a far more attractive proposition to parents out shopping for little Jimmy and Jane. Who in their right mind wants a contract and monthly fees for a gaming console?

 

[DieH@rd]

I always expected $15 monthly fee.

 

[LittleJohnny]

I think this is a super interesting pricing strategy. The subsidized price will attract a ton of consumers who don't think about the actual price of owning the machine (which is something ridiculous like $660 total), they only see the $299 up-front and think its a steal.

Very smart by Microsoft, I'm very curious to see how this works out

Not only that but also guarantee an Xbox Live customer for at least 2 years. Should increase the amount of Xbox Live users tremendously!

 

[TheLegendary]

You make a good point. Hell, it might even make the Wii U look like a far more attractive proposition to parents out shopping for little Jimmy and Jane. Who in their right mind wants a contract and monthly fees for a gaming console?

Parents already pay for Xbox live for their kids, how is this any different?

 

[QaaQer]

You really think they would also get rid of Live Cards (which are separate from MS Point cards)?

If they make it to where you must pay for Live directly from the system, forget that. There's no way I'm giving MS my CC info. Nope.

Then they might not even want you as a customer. Seriously.

 

[demosthenes]

no it doesn't
there is a subscription like this for the xbox 360 and last timed I check it doesn't work like you say

What happens if you stop paying now?

 

[plagiarize]

$40 over 2 years is not a big deal. It's one 3DS game in two years.

The real catch is that they will keep people subscribed to Live Gold.

and if they're not lying about it including family, as someone who is on the family plan, that'd actually be a saving.

 

[kitch9]

What happens if you cancel your payments early I wonder? Will MS disable the box completely until you start paying again?

 

[itsgreen]

and if they're not lying about it including family, as someone who is on the family plan, that'd actually be a saving.

Except that plan doesn't exist anymore. So that change will probably be Live-wide.

$40 over 2 years is not a big deal. It's one 3DS game in two years.

The real catch is that they will keep people subscribed to Live Gold. In a post PS+ world, Live Gold is a tough sell but on a new console it's even tougher. This locks poor people in.

Yeah but in reality you are able to get 2 years Live for $40 each, so that's $80 instead of $120

And the margin between the two options will be $80. ($580 vs. $660). That's quite a difference imo.

 

[RadarScope1]

All many will see is $299. It's going to do very well with families and people who already expect to be paying for Live and especially those who don't typically look for deals on the cost of the subs (or even know those exist).

As for the GAF and the core crowd, MS will need to bring something new to the table for Gold subs to make this appealing to many of us.

OK, Sony. It's time to shoot for $399 for the deluxe PS4 SKU........

 

[Quasar]

Not only that but also guarantee an Xbox Live customer for at least 2 years. Should increase the amount of Xbox Live users tremendously!

And certainly something MS has long wanted predictable ever flowing revenue. Software as a service what they have wanted for like ever. And with things like Office 365 they are finally getting there.

 

[ThoughtsOfSpeaking]

Id be interested to see what microsofts policy is towards stolen consoles. Will they offer insurance too?

 

[Chum]

Financing/subsidizing is a core aspect of economics that lowers the cost of entry. It's that simple.

Most people don't have $25,000 in cash to spend on a new car but are perfectly willing to pay the extra $2,600 (4% @ 60 months) in interest OVER the cost of the car to drive one off the lot. A subsidized 720 is a similar concept. Don't have the $500 for the standard version? Then buy the $299 version and "pay the rest off" over 2 years. Yes, it costs more in the long run but consumers are far more willing eat the monthly cost (see: American cellphone market).

 

[enzo_gt]

Extremely competitive price point, still. Shit is going to do gangbusters, even if they don't play up the gold family sub bit.

I agree, MS is pretty smart for doing this.

 

[QaaQer]

What happens if you cancel your payments early I wonder? Will MS disable the box completely until you start paying again?

I think that is what the whole "must be connected to play games" thing is all about.

 

[Maximilian Kolbe]

What happens if you stop paying now?

That's means you owe the bank too much money,the bank will find you first

 

[ironcreed]

Parents already pay for Xbox live for their kids, how is this any different?

Because they would also be paying for the console, when they could just buy another one with no such strings attached for around the same price of the subsidized model entry point. But that is just how I see it. I still think it will likely be a successful option, considering how so many have no problem paying for Gold already. I know I sure as shit will not be doing it, though.

 

[LiveFromKyoto]

$660... it's like $599 plus inflation.

 

[itsgreen]

$660... it's like $599 plus inflation.

That's quite a lot of inflation.

 

[btrboyev]

Most people are going to be paying for Live anyway...so are they keeping the $50 a year or are they making it all subscription based?

 

[Doran902]

That's a lot of cash they expect people to pay to play Call of Duty.

Maybe they will have a coupon day....or something.

 

[Maximilian Kolbe]

Except that plan doesn't exist anymore. So that change will probably be Live-wide.



Yeah but in reality you are able to get 2 years Live for $40 each, so that's $80 instead of $120

And the margin between the two options will be $80. ($580 vs. $660). That's quite a difference imo.

Since everything are rumors,that's what he talking about
https://twitter.com/tomwarren/status/328100156794875904
https://twitter.com/tomwarren/status/330328191078121473

 

[FlyFaster]

what are people going to do:

- If they want to sell or trade their system and are in a subsidized contract?

- If they are late on a payment?

- If they stop paying? Will the console still work?

 

[sixghost]

How do you know that you'll be able to get discounted cards once MS does away with their point system?

Because the vast majority of discounts come from retailers discounting the cards, not sales through XBL. I think it's unlikely Microsoft would stop selling XBL cards in physical stores.

 

[winjet81]

How will they afford that stuff?

With all the money they 'saved' by only spending $299 upfront.

 

[Maximilian Kolbe]

what are people going to do:

- If they want to sell or trade their system and are in a subsidized contract?

- If they are late on a payment?

- If they stop paying? Will the console still work?

- You use your credit card to pay

- You use your credit card to pay

- You use your credit card to pay

 

[ShinAmano]

OK, Sony. It's time to shoot for $399 for the deluxe PS4 SKU........

Would be nice, but I can't see nextbox costing more than ps4. And if ps4 is 399...what is to stop ms from matching and putting sub price at the magic 199?

 

[QaaQer]

what are people going to do:

- If they want to sell or trade their system and are in a subsidized contract?

- If they are late on a payment?

- If they stop paying? Will the console still work?

1) Pay (number of months remaining in contract) * $15 or do not sell console.
2) MS will disable the console remotely.
3) No.

just my guesses.

 

[jcm]

You're not figuring in the time value of money. It's really not a bad deal if you're already going to pay for Live.

If you are going to pay full price for two years of gold then it's 18%. Not extortionate, but not thing to be happy about, either. That's a higher rate than I would pay on a credit card, and doesn't include miles or cashback or whatever. If you can get your Live Gold subs for $40/year then it's more like 35%, which is terrible.

Plus, you don't have to buy two years of Live up front, anyway. Your first day out of pocket will only include one year of live.

 

[Chamber]

They'll hook a lot of people with the $299 price point. That's all they have to say in their ads.

Sony would be foolish to launch PS4 any higher than $399.

 

[Orca]

It doesnt. Im simply pointing there will be no net benefit to consumers with this deal. All it is about is increasing profitabilty in the short term. Profits that they are losing out further down the line in the process.

The install base wont get significantly bigger because of this, it will not cause 3rd partys to make games exclusive and Sony wont be destroyed in NPDs because of it.

so *shrug*

There's a benefit to consumers in being able to buy the console and several games day one. You pay more in the long run, but that's the issue with all financing deals.

 

[Ninja Moomin]

I think this is a super interesting pricing strategy. The subsidized price will attract a ton of consumers who don't think about the actual price of owning the machine (which is something ridiculous like $660 total), they only see the $299 up-front and think its a steal.

Very smart by Microsoft, I'm very curious to see how this works out

The bigger issue is what they are going to offer those of us who already have Xbox Live.

I have something like 24 months of live left... so that had better be worth something.

 

[jet1911]

299$ to play the next-gen COD/BF4

Yeah this will be a fucking succes.

 

[Vane_MagicCity]

Except that plan doesn't exist anymore. So that change will probably be Live-wide.



Yeah but in reality you are able to get 2 years Live for $40 each, so that's $80 instead of $120

And the margin between the two options will be $80. ($580 vs. $660). That's quite a difference imo.

You want to count the sale prices of the console too?

Let's say that you get $100 off the Xbox 720 at Target for a limited time and then make the comparison again. Fair?

 

[MightyHedgehog]

I personally expect the PS3 to be capable of PSV/PSP emulation. So I guess PSV games or games on Gaikia to play PS3 games for starters.

Given their lack of committing to specifics and talk about offering that at some point down the road, I highly doubt that Gaikai will be streaming PS3 games any time soon. And when they do, who is the audience who will have the necessary connection quality and put up with the added latency to games built for local play with much less tolerance for that added lag? It's too early for streaming tech to be widely acceptable for games never meant to played in that way. Unless we're talking slower-paced, turn-based games, or MMOs. PSN+ will have to evolve with media and social features in the early going, or Sony's going to have to be super-extra generous by offering new launch titles if they're going to pattern its value against the current PS3 version. Gonna be slim pickings until there's enough older stuff to offer. Of course, this doesn't talk about the possibility that PSN will be charged for, since Sony currently avoids direct response to that question (as well as the question of always-online), or that Gold won't evolve its own offering. Like you say, we just don't know.

As to the topic of $299 being too much, well, what does Sony do with a more powerful piece of hardware in PS4 if they don't offer a similar option? They've been pushing their Sony credit cards for years as a means to entice people to buy into their Playstation products at a discount with low introductory interest rates. What else, though? If the price is right and not purely speculation, doesn't this open the door to PS4 launching at $399 or even $499?

 

[Maximilian Kolbe]

1) Pay (number of months remaining in contract) * $15 or do not sell console.
2) MS will disable the console remotely.
3) No.

just my guesses.

Do people seriously think MS will phone you every months then "hey dude time to this month's payment,meet me at McDonalds tomorrow"?

 

[BadWolf]

Would be nice, but I can't see nextbox costing more than ps4. And if ps4 is 399...what is to stop ms from matching and putting sib price at the magic 199?

MS will announce their price first, both the reveal and their E3 conference takes place before Sony's.

It would look pretty embarrassing for them to go back and decrease the price after the PS4's is announced, no?

 

[maabus1999]

If the two year plan comes with an extended warranty versus the standalone version (2 vs 1 years), that is also a "value" that must be accounted for here folks. MSFT itself has to put that value in their books.

Also, look from a family perspective, this is a great deal to lower the cost, plus saves money upfront for purchasing software titles.

 

[Chum]

what are people going to do:

- If they want to sell or trade their system and are in a subsidized contract?

- If they are late on a payment?

- If they stop paying? Will the console still work?

As yourself the same questions from the perspective of a cellphone contract and you have your answers. It's not complicated.

 

[Mit-]

? So it's either pay full price or pay $15/mo subsidized like a damn cell phone? lol Yeah, looking more like after I'm done with my 360, I'm jumping out.

Uh, wtf option are you wanting exactly? Your ONLY OPTION used to be paying full price. I'm not sure why Microsoft opening up new payment options is a bad thing. If you don't like the contract, pay full price like always.

 

[Maximilian Kolbe]

The bigger issue is what they are going to offer those of us who already have Xbox Live.

I have something like 24 months of live left... so that had better be worth something.

Then you have 4 years live if you buy sub model