Noah J Nelson on Monday, Jun. 25th
About a month ago Microsoft started a pilot program in its own retail stores that allowed consumers to go home with an XBox 360 and Kinect bundle for the low price of $99. Of course, there was a hitch: a $14.99 a month subscription to XBox Live Gold (a premium over the usual Gold subscription) with a two year commitment. An extra year of warranty was thrown in to lessen the overall sticker shock; the math puts the package at coming out to $60 more than if you just pay up front.
Noted at the time was the similarity between this model and the model we find on phones.
Well, now that offer is coming to Best Buy and GameStop stores, which means it will pretty much be open to everyone. The restriction to Microsoft retail stores before was basically the offer as a private beta. Do YOU know where your local Microsoft store is? I thought not.
Okay, but what does this mean for the FUTURE of game consoles, since this is taking place RIGHT NOW?
Imagine that the next XBox and Playstation come out at a “buy it” price of around $600. In this economy who would want such a thing? The PS3 had a hard time making the value proposition for years. Now imagine that they could cram some high end hardware onto the service contract model, sell you the kit for $199 with a contract.
Instant install base. You’ll still be able to buy an “unlocked” Next XBox or PS4, but you probably will just swallow the contract like you do on your phone. Welcome to tomorrow. It’s just like today.