Microsoft's $99 Subsidized Xbox 360, Blunder Or Brilliant?

One of the worst kept secrets has finally come into the light today, Microsoft has announced that it has indeed launched a subsidized Xbox 360 bundled with Kinect for $99. The catch is that you have to sign a two year contract that will require you to pay $15 a month for Xbox Live Gold Membership. The deal itself comes out to be around $40 more in the long run, but its spread out over the course of two years. So depending on your income, this could potentially be a great deal, because the cost up front for an Xbox 360 with a Kinect and a year of Xbox Live would be $360 plus tax. Some people might look at only paying $99 up front as a steal.

On the other hand, some people might look at this as a rip off. To be honest, I’m a seven year Xbox Live Gold Member and I’ve never paid more than $30 a year for it. There are always some sort of deal going on where you can get cheap Xbox Live cards. Still, I remember when the Xbox 360 first came out and the same for the PS3, places like Rent-A-Center would rent to own a game console at triple the retail price, those consoles were among the most popular items people would rent to own. The reason people were willing to pay more over the long run is because its cheaper right now. You can buy one and be home playing it, instead of waiting months and sometimes years to save up enough money to purchase one outright.

I think at the end of the day it all depends on individual income and how quickly people want to jump right into the action. We live in a fast food kind of world and it seems like people aren’t really willing to wait and save to buy things, which is why places that rent to own electronics and even furniture are so popular. It also explains why most people are living with extreme credit card debt. Honestly, I was thinking Microsoft would just lower the price of the Xbox 360 and Kinect this year. I still think that might be a possibility, the other possibility is that Microsoft might just throw in a Kinect with every Xbox 360 iteration for free. So the $299 250 gig Xbox 360 will now be a $299 250 gig Xbox 360 with Kinect. The $199 4 gig Xbox 360 Arcade, will now be the $199 4 gig Xbox 360 with Kinect. Of course that is just speculation on my part, but this will be an interesting E3 for Microsoft.

One of the more interesting things that could potentially come from this would be a subsidized next generation Xbox. I can’t imagine that many people would pass up the chance at an Xbox 720 for a $99 price with a mandatory contract subscription for Xbox Live? I pay more than $15 a month for Netflix and for Gamefly, so a subscription wouldn’t really matter much to me as long as I was able to put less money down, and have the ability to take it home and play it sooner rather than later. You can’t say Microsoft isn’t ballsy when it comes to business strategy, and although this is currently only available in Microsoft stores, I could see it catching on and being sold at Walmart or at Kiosks in malls around the United States. If you think about it, this is evolution in the way people purchase a gaming console. Next generation consoles could very well cost between $500-$600, so a cheaper alternative might be just what the doctor ordered.

It’s a smart idea to keep an eye on how this subsidized Xbox 360 does. If its successful, you might see other companies take a similar approach, this is something we usually only see with cell phone, cable or satellite companies. Its going to be interesting to see where this goes and who gets pulled in by this new marketing strategy. What do you think? Let us know by sounding off in the comment section below.

Note: [All opinions expressed herein are those of the author and do not necessarily reflect those of GamerXChange]


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