MS introducing subsidized 360+Kinect bundle for $99 + 2yr, $15/month XBLG contract

Discussion in 'Console Industry' started by mrcorbo, May 2, 2012.

  1. Brad Grenz

    Brad Grenz Philosopher & Poet
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    Obviously the economic impact isn't the same, but the tactic is identical.
     
  2. Shifty Geezer

    Shifty Geezer uber-Troll!
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    Selling anything on credit is similar. Offering any loan is similar. It's just a conventional free-market approach to business, the ethics of which shouldn't be discussed here.

    As for cutting out Live! middleman fees, how will MS be selling this package to consumers? Surely the middleman is still involved somewhere, unless you can only buy direct from MS?
     
  3. Shifty Geezer

    Shifty Geezer uber-Troll!
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    Any link? The good thing with a discussion board is it all goes on the record!
     
  4. Dr Evil

    Dr Evil Anas platyrhynchos
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  5. Brad Grenz

    Brad Grenz Philosopher & Poet
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    It's just a bad deal. You're paying $360 over the long run for a $200 "loan". That would be considered usury in a lending situation. Anyone who actually has access to credit should make the purchase that way. This is predation on those who can't pay $300 up front and can't qualify for any credit. That is to say, the young and the poor who are the most likely to find themselves a few months down the road with an automatic $15 charge over-drafting their account and no means to pay an early termination fee.

    And that's without going in to this as a way to make a price hike look like a price drop...
     
  6. Shifty Geezer

    Shifty Geezer uber-Troll!
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    All money borrowing is a bad deal (except off family :p)! Except I guess it isn't if the added value of having the thing you want now is worth as much as the added cost. That is, anyone wanting a 360 who can't afford it could save up for it, which at these rates would take a year or so. If the $200 cost is worth that to the shopper, that's their call. Personally, I don't buy on credit or get loans as it's throwing money away, but our culture places the requirement on shoppers to work these things out rather than on businesses to only offer fair deals.
     
  7. Shifty Geezer

    Shifty Geezer uber-Troll!
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    Hmm. I'm not really seeing 'laughed off the board." Cheezdoodles didn't agree (wonder if he'll contribute here), but at the same time the principle argument was one of cost up front for launch prices. 7 years down the line where the hardware is cheap to make and a $99 downpayment will likely cover the hardware, there's no loss to MS even if payment defaults. Launching a new console with a $600 BOM at $99 + $15pm is a very different proposition.
     
  8. Dr Evil

    Dr Evil Anas platyrhynchos
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    No you are not. You'll be paying $459 vs $419. Two years of Xbox Live Gold is $120 + $299 for the console and Kinect.You are only paying $40 extra here. In reality the difference is even smaller than that, because you don't have to pay the console up front.
     
  9. Brad Grenz

    Brad Grenz Philosopher & Poet
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    Sure, but even a 20% credit card interest rate with the flexibility to cancel Live any time you need to is still way, way better than what MS may be offering here.
     
  10. Arwin

    Arwin Now Officially a Top 10 Poster
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    I think many people suggested that you could give the console away along with a fixed Live subscription. I am actually amazed it took so long to get here!
     
  11. Shifty Geezer

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    There are often better deals if people go shopping around. That's why comparison website were invented! And note this offer wasn't invented to give consumers a better deal on the XB360 (which is to be expected from business), but to offer an alternative purchasing option that could make MS more money.
     
  12. AlphaWolf

    AlphaWolf Specious Misanthrope
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    You might want to actually do that math on that. Obviously if you bargain hunt and pay discount prices you can get a better deal, but compared to full retail you're paying $40 for the cost of borrowing $260 for 2 years + $60 for 1 year. It works out to around 12-13% which in terms of lease to own plans is quite reasonable.
     
  13. Brad Grenz

    Brad Grenz Philosopher & Poet
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    My point is, if you are so financially unstable that you can't afford to scrape together $199 up front, what are the chances that you won't end up having trouble making your monthly payments later? Once you start paying $30 overdraft fees a couple times because there was no way to cancel a $15/mo charge that's automatically coming out of your account the deal gets exponentially worse. This is the crux of the backlash against all forms of predatory lending in the wake of the housing collapse. If you pay up front, even using real credit, 12 months from now if you lose your job or your car breaks down, or you get sick and miss a few shifts, you have the fucking option to not re-up your Live subscription and/or make smaller payments on your card instead of having your finances collapse around you. For the kind of people this deal is targeted at, $15 a month could be the difference between squeaking through and finding yourself overdrawn by hundreds of dollars.

    If MS really wanted to make the 360 more affordable, maybe they should finally do a real price drop. Not this bullshit attempt to make it look more affordable while charging more.
     
  14. Arwin

    Arwin Now Officially a Top 10 Poster
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    They don't want to make the 360 more affordable. They want to make it look more affordable while increasing profits.
     
  15. Shifty Geezer

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    Who says they're trying to drop the price? By all means rant against 'predatory lending' in the right forum, which is endemic to our Western society, but this nothing more than an alternative sales option, and one that arguably paves the way, or at least tests the water, for the possibility of a rented scheme in future, which is worth discussing as a console business topic.
     
  16. Dr Evil

    Dr Evil Anas platyrhynchos
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    This unit is $299 not $199. In reality it's not a bad deal. Obviously if you don't want to play online, the deal is not for you, but $200 off from the upfront costs and 10$ extra per month vs regular live for two years is $40 only dollars more and it's evened out for two years, and with the big upfront saving the real value of that $40 diminishes down to almost meaningless. The new model is a good option for the consumer and it certainly isn't a cash cow to MS.
     
  17. mrcorbo

    mrcorbo Foo Fighter
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    I remember distinctly how, when Sony was losing buckets of money on each PS3 sold and yet it was still sold at a price premium over the 360, persons on this board were arguing that, in the long term, the PS3's components had more room for cost reduction than the 360 and that they would eventually reach price parity or near price parity. Additionally, the current iteration of the 360 is an enhanced version of the launch hardware (with the exception of the memory card slots, if you want to be precise) while the current PS3 is stripped down compared to the the launch hardware.

    I'm sure even with those considerations you believe the 360 is overpriced. That's fine. If enough of the market agrees with you I'm sure it will be reflected in the sales numbers as compared to the competition.*Content edited and question redacted - wrong forum*
     
    #37 mrcorbo, May 3, 2012
    Last edited by a moderator: May 3, 2012
  18. Shifty Geezer

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    That's a discussion for the RSPCA forum. The very mention of 'moral considerations' in your sentence should have alerted you to that.
     
  19. Arwin

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    It's a weird combination of Kinect on the one hand, and paying for Live without getting a HDD included on the other though. I'd never go for an option like that wihout an included HDD, but I can understand Microsoft for going for it.

    I also believe the Kinect bundle is current deliberately overpriced. At least here, it costs €250 for 360 + 250HDD + Kinect + Kinect Adventures. So for the first time for any electronics device for as long as I can remember, the European version seems cheaper.
     
  20. kagemaru

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    I would never buy into this type of deal, but I don't understand why some people would be bothered by it. It's just another option, not something that is forced, so no harm really. To some families/people, there's a major difference between spending $99 upfront and spending $299 all at once. So the $15 a month, after the initial $99 fee, may be manageable to them.

    Even though Al may have been partially joking, offering a similar discount when upgrading to durango/720 may keep a lot of people for at least another 2 years.

    Honestly, if MS or Sony could subsidize a $600-$700 console for $300, I may jump in if it results in a more powerful console. Unlikely to happen, I know.
     
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