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

[dobwal]

A UK rent-to-own price:
http://www.brighthouse.co.uk/gaming/xbox-360-250gb-kinect-bundle/

29.9% APR. And AFAIK from Googling the name of the store, they are doing well in the recession. Maybe someone can link to equivalent US stroes for comparison? Seems to me though that for this sort of finance MS are offering a great deal.

Similar stores in the US tend to charge way more.

Furthermore, wasn't Sony's deals alot better? You could apply for Sony credit card and get $100 (or was it $150 or both at two different times) credit on your purchase of a PS3. However, I don't recall the same level of ethusiasm for those deals.

 

[dobwal]

One is MS's suggested retail price, the other is retailer discounted. DUH.

Who cares? Suggested retail prices are just that suggested, discounts are readily available on Amazon and other places weekly.

I just bought a 360 Kinect to be given away at a charity event just last week. I didn't even try to look for a discount and yet I bought discounted one in the target right by my house.

 

[AlphaWolf]

I'm sure your mind can work this through. They can offer discounts, MS rumored plan with a MSRP of $99 + $15/month. Retailers offer discounts. Am I getting anywhere yet? Do you somehow think this plan will only be offered directly from MS? I suppose that's possible, but do we have any reason to expect that to be the case?

 

[dobwal]

I'm sure your mind can work this through. They can offer discounts, MS rumored plan with a MSRP of $99 + $15/month. Retailers offer discounts. Am I getting anywhere yet? Do you somehow think this plan will only be offered directly from MS? I suppose that's possible, but do we have any reason to expect that to be the case?

Work your mind through this...

"The software giant will offer the 4GB console with a Kinect sensor at its range of Microsoft Stores in the US, subsidized with a monthly cost of $15."

Go read the article and then come back and comment. And maybe we will be on the same page and our debate can revolve around some standard points.

 

[Squilliam]

I think people are forgetting an important piece of information about console purchases. People almost never walk out of the store without an assortment of games and accessories. The price of the console may be $299 but by the time you buy a few things to actually make your purchase useful you're looking at north of $399 and from my experience in selling consoles people typically spend about $1-200 on games and accessories.

What this console deal means is that you can walk into a store and leave with a working console and games for typically between $199 and $299 which is something considerably more affordable for a lot of people than flat paying $399-499. I also bet that Microsoft expects that the typical customer who buys a console @ $99 will walk out with more games and accessories than a customer whom paid $299 for the console and that a certain percentage of these consoles will be purchased and never connected to Live, effectively money for nothing.

Edit: Another interesting thing is that the people who sign up between now will start coming off contract about 6 months into the expected next generation starting point which means that they can likely pace their demand better during the quieter summer months in 2014. It'd be a good way to keep momentum of sales moving by having people coming off contract in the quieter months.

One other thing: What does this mean for the possibility of price cuts? Are they simply going to move to a subscription model as a way to lower the price instead of outright cutting the MSRP?

 

[Shifty Geezer]

I'm sure your mind can work this through. They can offer discounts, MS rumored plan with a MSRP of $99 + $15/month. Retailers offer discounts. Am I getting anywhere yet? Do you somehow think this plan will only be offered directly from MS? I suppose that's possible, but do we have any reason to expect that to be the case?

I don't see anything in this for the retailers, so I imagine it would remain just an MS thing. As a result, MS probably see a fair bit more money from this direct sale than from selling to middlemen.

 

[Shifty Geezer]

Furthermore, wasn't Sony's deals alot better? You could apply for Sony credit card and get $100 (or was it $150 or both at two different times) credit on your purchase of a PS3. However, I don't recall the same level of ethusiasm for those deals.

An added incentive for opening a credit card is very different to a hire-purchase agreement. This is something new in the console space - a deferred payment strategy from the console company itself, directly marketed as making a console affordable in monthly installments like a typical UK sofa sale. It's not framed as a loan or a credit card, and as such has a different psychology. It also supports MS directly with better funds.

On an interesting note it's quite possibly illegal for MS to offer this deal at a lower price due to anticompetitive laws. they may be hoodwinked into having to charge enough that retail chains can be price competitive. I'm not sure about that, but I vaguely believe that's why it's rarely cheaper to buy software and the like direct from the publisher than through a retail chain. It may not be a legality, but Ms don't want to see XB dropped from angry stores who are promoting MS's console only for customers to go and buy direct from MS instead.

 

[joker454]

Who buys 2 years of Live subscriptions at a time?

(Raises hand)

A UK rent-to-own price:
http://www.brighthouse.co.uk/gaming/xbox-360-250gb-kinect-bundle/

29.9% APR. And AFAIK from Googling the name of the store, they are doing well in the recession. Maybe someone can link to equivalent US stroes for comparison? Seems to me though that for this sort of finance MS are offering a great deal.

Yeah I don't understand why people are up in arms about this. People have been paying $700,000 for a $300,000 house, or $45,000 for a $30,000 car for many many years now, it happens every singe day with the many finance options available. But somehow $40 to subsidize a console and maybe allow everyone a more powerful console in the process is a horrible thing. I don't get it. Am i missing something here?

 

[AzBat]

Personally I think it's a great option. It's even something I'm considering myself since I'm wanting a spare system to eventually replace my dying out-of-warranty system. Anyway, I always pay for a Gold subscription anyway for Netflix, multiplayer, etc. So having an option to buy a console bundle at a considerable discount while paying installments is appealing. I'm one of those people that have had bad credit & go pay check to pay check. Been paying on a Discover Card ever since college 15 years ago & I'm finally starting to get back on my feet. In fact, I was able to purchase my first home last week & I'm almost 40. I was able to do it by not buying things on credit the past 10 years or so. I pay for my cell phone using a pre-paid service in order to not have to have my credit checked & stuff like that. But I will say I've never used a rent-to-own service. I'm not totally dense. LOL So why would I consider this as an option? Mainly because now I have other priorities & don't have $300 of disposable income, I know there are probably better deals out there & using a credit card would be cheaper in the long run, But I don't want a credit card ever again. So if Microsoft could offer this deal without a credit check I would probably jump on the deal.

Tommy McClain

 

[RobertR1]

Congrats on the new home Tommy!

 

[DuckThor Evil]

Yeah I don't understand why people are up in arms about this. People have been paying $700,000 for a $300,000 house, or $45,000 for a $30,000 car for many many years now, it happens every singe day with the many finance options available. But somehow $40 to subsidize a console and maybe allow everyone a more powerful console in the process is a horrible thing. I don't get it. Am i missing something here?

I agree with you, but this isn't really subsidizing unless 4GB 360 and kinect sensor costs more than $340 to make. You just pay the full sum in two years. If the monthly fee was the same as regular Live fee instead of $10 more, you could say that the console is subsidized.

 

[AzBat]

Congrats on the new home Tommy!

Thanks Robert! It's been a long time coming, but we did it. Moved in last week & things are finally to settle down. Just to make this post somewhat game related: I now have two rooms with a lot more room for playing Kinect, provided we get all the boxes unpacked! Hopefully I'll get a chance to play some this weekend. It'll be nice to not have to move recliners just to play.

Tommy McClain

 

[joker454]

I agree with you, but this isn't really subsidizing unless 4GB 360 and kinect sensor costs more than $340 to make. You just pay the full sum in two years. If the monthly fee was the same as regular Live fee instead of $10 more, you could say that the console is subsidized.

We'll have to see what's ultimately included in the package, they may include more services in the price.

 

[Tap In]

there was a little blurb at the end of the original statement that said somethign about possible future downloadable content IIRC, so maybe ot wil include free or discounted arcade or game add ons or GoD?

 

[KongRudi]

So basically MS is charging 459,- for the console wich came out 7 years ago for 399,- at launch, with voice-remote and 2 year free online..
And people here is actually concidering taking advantage of this deal?
Sometimes you guys blow my mind.

 

[Shifty Geezer]

So basically MS is charging 459,- for the console wich came out 7 years ago for 399,- at launch, with voice-remote and 2 year free online..
And people here is actually concidering taking advantage of this deal?
Sometimes you guys blow my mind.

Uh, yeah. Cost up what you'll have to pay for an XB360 and 'voice remote' and 2 years paid online now and you see it's not a terrible deal. The fact people are still willing to pay that much and MS haven't had to drop the price to $120 shows their product has maintained value - you don't just drop the price because it's tradition, and you shouldn't expect it to be cheaper now if it doesn't need to be.

 

[Brad Grenz]

The fact that MS thinks there needs to be a "$99" price point sure suggests to me they see value in a lower price point. It's just a shame if instead of actually being cheaper, they're going with this seem cheaper, but charge more idea.

 

[BRiT]

When/If MS throws in a monthly Music pass and some other Movie-pass then this is not a bad deal at all.

 

[Shifty Geezer]

It's just a shame...

For consumers, but not for MS and their business, which is their objective.

 

[KongRudi]

Uh, yeah. Cost up what you'll have to pay for an XB360 and 'voice remote' and 2 years paid online now and you see it's not a terrible deal. The fact people are still willing to pay that much and MS haven't had to drop the price to $120 shows their product has maintained value - you don't just drop the price because it's tradition, and you shouldn't expect it to be cheaper now if it doesn't need to be.

Shopping directly at Microsoft with this bundle, I have to pay 99 upfront, for a Kinect/360 bundle, provided I have to pay additionally 15 dollar 24 months, making that 360 more dollars.

So basically I pay 100 dollars to make a 360 dollar loan, to pay for the rest over two years.

If I went to Amazon added Kinect/360 bundle, and two 12 month Live membership-cards. All New. I end up at 372, in total, with all sorts of payment-options.

That's 12 dollar more than the entire loan you can buy from MS for 100$.
i.e. you can spend 85$, to get that loan of some sensible corporation.