MS introducing subsidized 360+Kinect bundle for $99 + 2yr, $15/month XBLG contract
- Thread starter mrcorbo
- Start date
It's kind of confusing how car insurance works in the states, I'm a foreigner.
Here in Norway, you can register and drive a uninsured car, however you need a basic insurance on the car, to pay for eventual damage to other peoples property you crash with, if you know what I mean.
And then you buy various quality of insurances for your own damage, i.e. you get full payment, you pay half, insurance-company pay half, etc.depending on what premium you pay, and some other criterias.
This thing MS proposes, won't be legal anymore here in Norway.
This kind of advertising became illegal here after cell-phone companies started selling 1 dollar phones a few years ago, provided they signed up for a expensive service - it were a mini-boom of people, especially younger students, and similar wich got into financial trouble.
So the marketing-laws got changed, and now there is advertising and information rules if people has to sign up for a monthly fee along with the purchase.
All the advertisements will also have to clearly display the total minimum-price. Not just the super-cheap product, and monthly fee..
So in this case, MS would have to advertise the price like this:
Xbox 360 + Kinect 99$ + locked in:15$ monthly fee for 2 years.
(Total cost: 459$)
And in the store, the sales-rep in a store will also have to tell the customer how much he/she will have to pay in total, not just what he pay now, and each month.
And even tough we signed a contract to use a subscription-service for two years, we can change our mind and cancel the purchase - however that has to be done within 14 days after the service is made available to the consumer.
Here in Norway, you can register and drive a uninsured car, however you need a basic insurance on the car, to pay for eventual damage to other peoples property you crash with, if you know what I mean.
And then you buy various quality of insurances for your own damage, i.e. you get full payment, you pay half, insurance-company pay half, etc.depending on what premium you pay, and some other criterias.
This thing MS proposes, won't be legal anymore here in Norway.
This kind of advertising became illegal here after cell-phone companies started selling 1 dollar phones a few years ago, provided they signed up for a expensive service - it were a mini-boom of people, especially younger students, and similar wich got into financial trouble.
So the marketing-laws got changed, and now there is advertising and information rules if people has to sign up for a monthly fee along with the purchase.
All the advertisements will also have to clearly display the total minimum-price. Not just the super-cheap product, and monthly fee..
So in this case, MS would have to advertise the price like this:
Xbox 360 + Kinect 99$ + locked in:15$ monthly fee for 2 years.
(Total cost: 459$)
And in the store, the sales-rep in a store will also have to tell the customer how much he/she will have to pay in total, not just what he pay now, and each month.
And even tough we signed a contract to use a subscription-service for two years, we can change our mind and cancel the purchase - however that has to be done within 14 days after the service is made available to the consumer.
Silent_Buddha
Legend
Aye, if this were a car insurance analogy.
You buy a car, it comes with a warranty. If you bought on credit, you have monthly payments.
You buy the X360 subscription plan, it comes with a warranty. You have montly payments.
If your car is stolen you still HAVE to pay the monthly payments on the car that you no longer have. So if the same is true with the X360 subscription plan, guess what? It's the same.
You can buy insurance for a Car.
You can buy insurance (home owners) for the X360.
In both cases, depending on the level of insurance you buy seperate from the purchase of the car or console the insurance company not the manufacturer will replace or reimburse you what the market value of the item is. Not the purchase price, but the current market value. So a 20,000 USD car is likely to only get you 15,000 USD if it is stole a week after you bought it despite that being lower than the new car price and despite the fact that your down payment may have only been 1000 USD. An X360 with Kinect will likely get you 250-299 USD from the insurance company despite the fact that you only paid 99 USD up front.
Again, in both cases, guess what? It is exactly the same.
Regards,
SB
You buy a car, it comes with a warranty. If you bought on credit, you have monthly payments.
You buy the X360 subscription plan, it comes with a warranty. You have montly payments.
If your car is stolen you still HAVE to pay the monthly payments on the car that you no longer have. So if the same is true with the X360 subscription plan, guess what? It's the same.
You can buy insurance for a Car.
You can buy insurance (home owners) for the X360.
In both cases, depending on the level of insurance you buy seperate from the purchase of the car or console the insurance company not the manufacturer will replace or reimburse you what the market value of the item is. Not the purchase price, but the current market value. So a 20,000 USD car is likely to only get you 15,000 USD if it is stole a week after you bought it despite that being lower than the new car price and despite the fact that your down payment may have only been 1000 USD. An X360 with Kinect will likely get you 250-299 USD from the insurance company despite the fact that you only paid 99 USD up front.
Again, in both cases, guess what? It is exactly the same.
Regards,
SB
Who's to say they won't or wouldn't? They haven't announced the deal yet, or started advertising it, so it's way to early to make assertions like "This thing MS proposes, won't be legal anymore here in Norway." Plus it's only a US deal, making legal evaluations to other legal systems immaterial except in considering how the system could be expanded.
So only in the US, customers who want an XB360 with 2 years worth of Live who don't want to pay the full hardware costs up front can either use a thrid-party hire-purchase service and pay 30+% APR interest, or use the deal from MS for around RRP and little interest. If they want an XB360 but can't afford it up front, yet don't want to be tied in to Live for two years, they can save up for an XB360+Kinect, or get a loan, or get a credit card deal, or go without. It's all about choices - what is actually wrong with the one MS is offering?
The bundle is now available on the Stateside MS Store, $99 plus $14.99 per month for a minimum of 2 years.
Bricks & mortar only, but if you want to see the deal & the required coupon go here...
http://content.microsoftstore.com/store/xblive2yr-offer/
BTW, here is the Terms of Use...
http://www.xbox.com/en-US/Legal/xbox-live-contract-terms
I've highlighted the items that weren't really known. There's also no details on the rumored "additional streaming content from cable providers or sports package providers". And the TOU also doesn't confirm the 2-year warranty. Maybe some of the details have to yet to been fleshed out, but the credit check & credit card requirement is deal breaker for me.
I still think it's a great option for some people & I'm sure Microsoft will sell a few of these once they make the offer outside of their own brick & mortar store.
Tommy McClain
http://content.microsoftstore.com/store/xblive2yr-offer/
BTW, here is the Terms of Use...
http://www.xbox.com/en-US/Legal/xbox-live-contract-terms
I've highlighted the items that weren't really known. There's also no details on the rumored "additional streaming content from cable providers or sports package providers". And the TOU also doesn't confirm the 2-year warranty. Maybe some of the details have to yet to been fleshed out, but the credit check & credit card requirement is deal breaker for me.
I still think it's a great option for some people & I'm sure Microsoft will sell a few of these once they make the offer outside of their own brick & mortar store.
Tommy McClain
They didn't..
The good thing about this deal is that it isn't available to people under 18.
The rest are pretty bad, I think - the early termination fee if you fail to pay the monthly 15 dollars on month 3 ontime, forinstance.. You'll get your account closed - and be billed 250 USD + tax - as an offer and not a penalty, to compensate Microsoft for losses they suffer - wich were bolded in the contract-license, were abit funny aswell..
Not funny, but normal. Most credit deals have similar clauses (maybe not in Norway, but Norway has very strong consumer laws). this deal is no different to many others a consumer could get, so MS shouldn't be identified as being particularly evil or anything. They are just following standard consumer practice, actually being a bit generous regards their lack of profiteering, although obviously they know they generate revenue from content sales so they don't need to make money direct from the console sale.You'll get your account closed - and be billed 250 USD + tax - as an offer and not a penalty, to compensate Microsoft for losses they suffer - wich were bolded in the contract-license, were abit funny aswell..
Ignoring all that boring finance talk, the fact this is only B&M speaks volumes to me. MS have 21 stores. Their reach with this is going to be pretty small. Hence this can't be a significant strategy by MS to expand their install base, but just a taster to see how such a deal will be viewed by consumers.
so... its basically allow "Renting" xbox 360 + kinect for 1 month for $14. 99?
or for "free" if you bind (this is not the proper word, sorry) the $14. 99 to your current xbox gamertag. or just login using the gamertag from new xbox.
maybe usefull for "testing" kinect in people house that afraid to buy kinect because small house, too many sunlight, etc.
Because from the term, by bring back the Xbox in 30 days, money can back except the $14. 99 sub fee.
or for "free" if you bind (this is not the proper word, sorry) the $14. 99 to your current xbox gamertag. or just login using the gamertag from new xbox.
maybe usefull for "testing" kinect in people house that afraid to buy kinect because small house, too many sunlight, etc.
Because from the term, by bring back the Xbox in 30 days, money can back except the $14. 99 sub fee.
RancidLunchmeat
Veteran
I agree with Gerry.
What?
There is nothing different about this deal than any other subsidized cell phone contracts which the majority of Americans participate in.
I don't understand what the possible "scheme" would be or the attempts "credit wise" to have the insolvent jump in.
In fact, the agreement plainly states that a credit check WILL be run. -One of the reasons that Azbat said he changed his mind on the deal. He doesn't want his credit report dinged (which it is, whether you are accepted or denied, just like any line of credit.)
The fact that they are running credit checks makes it unlikely that they are trying to rope in people who can't afford it. In fact, it demonstrates the exact opposite.
I see this as a pretty basic leveraging of MS's ability to provide credit while moving consoles that will quickly become obsolete (probably before the 2 year contract expires) and all the way getting people tied to Live! accounts so they'll want to transition to the next gen.
It's a pretty basic extension of their core strategy. Which is to get an xbox into every living room and get as many of those signed up to Live! so they can sell them additional services.
What?
There is nothing different about this deal than any other subsidized cell phone contracts which the majority of Americans participate in.
I don't understand what the possible "scheme" would be or the attempts "credit wise" to have the insolvent jump in.
In fact, the agreement plainly states that a credit check WILL be run. -One of the reasons that Azbat said he changed his mind on the deal. He doesn't want his credit report dinged (which it is, whether you are accepted or denied, just like any line of credit.)
The fact that they are running credit checks makes it unlikely that they are trying to rope in people who can't afford it. In fact, it demonstrates the exact opposite.
I see this as a pretty basic leveraging of MS's ability to provide credit while moving consoles that will quickly become obsolete (probably before the 2 year contract expires) and all the way getting people tied to Live! accounts so they'll want to transition to the next gen.
It's a pretty basic extension of their core strategy. Which is to get an xbox into every living room and get as many of those signed up to Live! so they can sell them additional services.
I'm not sure about that. The distribution of this deal is too limited, whereas a worldwide pricedrop would reach far more customers. The problem then is getting them to use Live. I know a mum who bought her son (9) a Kinect XB360 for his BD, and they are wary of using the Live one month trial. She has read up on the parental controls though.
They may just be testing it out on the old dog before the new console comes out. Maybe when the Xbox 720 comes out they will have negotiated with the major chains to offer the same financing deal everywhere.
That's what I was suggesting earlier. This smells of a test to me, rather than a full alternative sales initiative.
RancidLunchmeat
Veteran
Ehh? You must have missed my point, Shifty.
This isn't about "reaching far more customers", they're not interested in dropping the price to lower their current margins just to move hardware.
This is about locking people into Live! so they can sell them additional services for additional profits and keep them "on the leash" so to speak for the next gen.
Your friend who is weary of using Live is exactly the kind of customer that MS would like to phase out, move on from, or comprise only a minority of their user base.
And, as I said, that has been MS's core goal since entering the console market. This entire enterprise for MS is about owning the living room and controlling the distribution channel. Making money off people who want to provide non-internet enabled entertainment to their children is a secondary objective. Icing on the cake.
playaplayer
Newcomer
So with this new subscription plan going on right now. Do you think we'll get next gen consoles with HD 8970 and 4gb gddr5? $600 if you want to pay up front, and $650-$700 if you pay via subscription.
Okay. You said, which I picked up on:
This deal isn't going to help with market penetration even if every XBox with this deal is Live locked. But as the reach is so small, the actaul fiscal benefits to MS are likely to be also small. So I can only see this as a testing of the waters. It's not going to do MS's bottom line many favours. Maybe a better way to get people locked into Live is to have a $99 console with 6 months Live subsscription including free content (like PSN+) which disappears when the subscription runs out?
