Ben-DutkaThe big news today didn't involve the PlayStation 3; it involved Microsoft's announcement of a new – and not necessarily cheaper – Xbox 360 offer.
It's reminiscent of how cell phones are sold, in that the consumer will pay $99 for the 360 console that comes with a 4GB hard drive and the motion sensing system, Kinect. But it's only a hundred bucks if customers commit to a two-year Xbox Live Gold subscription…yeah, reminds me a lot of getting my phone for free when signing up for the two-year data plan.
Now, you're really not saving much of anything; in fact, you're not really saving at all. But consumers aren't always the sharpest cutlasses on the rack; most will only see that $99 price tag and not add up the actual cost (and compare it to paying for everything separately). See, I know my "free" $600 phone would end up costing me more than that with the $30/month plan, and that's without the insurance. But hey, it works, right? I got the damn thing, didn't I? The standard rule of commercialism and capitalism is that in truth, you don't get anything for free.
So the question is whether or not Sony should follow suit. Maybe this is a better option than a price cut. A price cut might actually hurt initially, but this way, you're only sorta fibbing to the consumer in the interest of driving sales. It's a common tactic. Yes, there are early cancellation penalties in place for this $99 360/Live deal ($250 to cancel in the first three months, down to $12 in the 23rd month). And Sony could do exactly the same thing; toss in Move, require a Plus subscription, and sell the PS3 for $99.
Why not?
It always rubbed me the wrong way that early this gen people thought the 360 was always the cheaper option, but at that time you had to buy a hard drive, a wi-fi adapter, neverending batteries, and Live if you wanted to go online. But there people were… lining up to get RROD on that sucker.
Should Sony do it? Well I consider it sleazy as hell but as you say this is capitalism and it might help nudge the sales over the last benchmark this generation. You can fool some people all of the time, you can fool all of the people some of the time, and you can usually fool most active consumers most of the time.
I say why not, if people want to pay for stupid gimmicks, then let them.
If someone wants to feel better about their near $500 xbox purchase, or ps3 if sony follows with something similar, I guess it's their right to be blindly led around.
I agree World… Sony should give them hell and lower the PS3 price to $99 for a week…
It's like switching Turbo on in a race car… needs that final leg up to really start moving away from the rest of the pack…
Q!
"play.experience.enjoy"
The reason this is out there right now is because of the 2 year contract for the gold membership. $15 for 24 months. Usually its only what…$50 for a year right? So lets see….15 x 24 = 360 (ironic?) so instead of paying $100 for 2 years of gold you pay $360. Now lets add in how cheap the system is now… $460 instead of $400 for the system and 2 years of gold. Its really for the consumer who cant afford the 299 price tag. They make it seem like this great deal which you pay almost nothing up front but end up paying more in the end. Its kinda like you pay them $60 interest for this great deal. Is it still that great??
Last edited by Stabs88 on 5/8/2012 8:43:56 AM
@ Stabs
You're not really paying monthly for Gold as much as you are paying interest to MS for subsidizing the console to the consumer in the first place. MS may try to advertise the gold subscription as the reason why you're paying $15 a month, but it's very clear that you're more or less paying back MS for giving you a 360 and Kinect for $99.
I think you end up paying $40 or $60 more than you would had you paid for everything up front (basically you're interest expense). Is that worth it to you? Most likely not if you can afford to just buy it up front, but this form of pricing allows people who can't to get an Xbox right away. And the $15 a month is cheaper than some MMO's and Netflix subscriptions, and def. way cheaper than cell phone subscriptions.
Screw Microsoft and their sleaze.
I think Sony ought to just drop the mainline Ps3 to $199.99 and advertize is as online HD gaming at $199.99 with no strings, no commitment, and no contract. Free online gaming for all…
Why would you even say that?
If Sony made a horrible deal like microsoft new $99 xbox deal, I would look down on sony.
Sometimes you have to play dirty.
I don't think this is dirty at all, unless you call every delayed payment deal out there dirty. It's always a better deal to pay upfront, but if you can't then these kind of deals can be interesting. I've seen much, much worse deals than this.
I think it's quite smart!
Over half of 360 owners use it to play games online with their friends, or stream media like Netflix, so Live Gold is a must!!
If you're going to use the 360 online for at least 2 years, why not get a massive discount on the console purchase if you're already going to pay for Xbox Live?
Unless I missed the point and Live Gold will be more expensive on the $99 360 console plan…
As for marketing and the business behind it… I applaud MS for once again finding another way to draw money from poor suckers who think the 360 is the better console and the cheaper option.
@Beam
Ah, but I do consider most delayed payment deals dirty! lol :p
All those deals with no interest no payments for 1 whole year, or whatever they say… then they don't tell you… if it isn't paid off in that time, well, then you get charged interest… and interest retroactive to the date you bought it!
lol… I see youth get suckered by this all the time (And by youth, I mean age 15-29, which is the demographic my organization serves) We have a financial advisor donate time to talk about predatory money lending and "good" vs. "bad" debt to our youth every month!
You're more or less extending the customer a line of credit. And I do believe that this type of practice will be very appealing to all kinds of people judging by how successful apple is at selling fancy phones.
It's somewhat sleazy if they try to hide the 2 year contract in their marketing, but it's also a great idea to tap into a completely different market of people. Sony should absolutely follow suit. At least in N. America
Well, the thing is u can play PS3 online without paying, but you've gotta pay to get online with xbox, so if sony did this it would be kinda stupid. To me, ps+ is a waste of money, and has been since they put it out, you pay money, just to spend more money….. sometimes you get free games/avatars/whatever, but most of it is junk and not worth it at all.
As for the motion tech, I dont think many people are intrested in it at all anymore, it's a gimmick, and everyone knows it, hell Nintendo sold an entire system around it.
It's not total junk, I've got TR Underworld and Trine 2 among other things. It kind of sucks that they disappear if I quit though.
I know I might get downvoted for this, but I'm afraid MS has done one helluva job making people think Live is better since it costs more. In some ways, it is better than PSN, and these are examples from my own experience…
– Cross game chat from day 1.
– No lag when streaming videos (PSN lags terribly and often the sound is out of sync with the picture, and I have 12 Mbit/sec broadband!!)
– Getting friends to join your game or joining a friend's game on Live is so much easier and smoother than PSN
Other than those 3 things, PSN is pretty much on par with Live in quality and service, but I would gladly pay the $70 per year for lag free video and cross game chat.
Charging to play online at all though is a bit rough. If MS really wanna dominate, they should allow Silver Live subscribers to play online but not communicate with other players.
And let's face it, Move (while still great tech and brilliant for core games) is no where near as desirable as the kinect with casual gamers, dancers and gym buffs. While Sorcery will be great on Move, dancing and fitness games are better suited for Kinect, no controller to hold in your sweaty hands, no sensors to strap to your body, just the camera.
While the core gamer inside me prefers Playstation for gaming, the multiplayer and party movement casual gamer in me prefers Kinect and 360. Thank GOD Sony have the best exclusives and a high quality console and blu-ray, cos MS is kicking ass with party games and online multiplayer right now.
I disagree with the streaming, I have a 30 down and a 9 up pretty close to a 10, I get absolutely no stream lag and it loads instantly for me.
No hassle on my end of getting a game together for online play, it's pretty easy. Cross-Game chat isn't a biggie for me though although it would be a cool feature to have for gaming.
I don't know how x360 online play is, but the ps3 psn message system to join a game is pretty darn cumbersome imo. Luckily not every game use that functionality, but many do, and it feels pretty archaic.
I agree, Beam. Personally, I think developers should incorporate party options in their development to best suit their games. But w/e.
Well i use to have Live but to be honest i don't think it's worth paying the fee to get what you pretty much get for free on PSN… Aside from the cross game chat and easier way to invite multiple friends at once to a game then there isn't much diffrence in the two… Well except that one is free and one is the price of a new game
I saw this @ Sourcefed a youtube channel which actually said something really intresting. This would in fact actually help a lot of low income families that don't have the kind of money to drop 300 bucks at once, now with that in mind should Sony do it? if it helps sales sure why not. Everything that is "financed" comes with interest does it not?.
Thats true. I truly believe that this $99 Xbox deal MS has going is going to be ridiculously successful. Low income familie's are more or less financing Xbox and Kinect over 2 years…and $15/month payments are VERY affordable for all kinds of people.
Probably because Sony doesn't want to bullshit customers…
For online gamers, Live Gold is a must, so why not get the console cheaper if you're already going to fork out extra for the online service?
I honestly wish this had come out sooner!!
If you're not going to play online, then yeah, ripoff.
I think Sony should drop the price of the PS3 to $200 with an emphasis on their free to play psn. Then reprint their packaging with a cost comparison chart showing how the $99 xbox360 will cost you more within the first year of ownership. A friendly reminder below the xbox side of the chart telling you that you still have one more year of xbox live to pay for.
^This
Tes37, nice idea, but there may be an issue with the advertisement standards authority. I guess you can't make direct comparisons… maybe a generic comparisons of the higher costs associated with "other" consoles…
Q!
"play.experience.enjoy"
They can say it without really saying it 🙂
Wireless companies and cable companies do it all the time!
SONY does this!
The "Other Guy" does this!
I think this is a very interesting and downright clever idea by Microsoft. Much smarter from a business perspective than yet another price cut.
But more interestingly for us who already got our current gen console, is this: This MUST mean that the next Xbox is JUST around the corner. This is obviously the last market push of the x360.
So what are the chances now for both Sony and MS to reveal their next console at this years E3? As things stand now I'd say it's close to guaranteed. MS didn't even wait for E3 with this news, but roll it out *before* E3. Signs, folks. Signs.
Like it or not: The next generation consoles are coming, and they are coming fast.
Last edited by Beamboom on 5/8/2012 12:28:57 AM
I'm actually looking forward to next gen now!! About 3 months ago, I couldn't care less, but if MS get blu-ray and the Xbox 720 is backwards compatible with all 360 and Live downloaded software, that will be a BIG draw for me.
Sony have the best games though, so it's a wait and see situation right now.
I hope Sony have their own 3D camera similar to Kinect that works with Move but can also work without it. Playing Michael jackson on Kinect is much better than Move, all dancing and fitness games are better on Kinect (and the gym buff in me loves that!!)
But for core games like Sorcery, Tiger Woods, Tennis games, Heavy Rain, shooters, Move is by FAR the better option, but Sony really need a Kinect-like camera if they want to draw the casual fitness gamers like me and my family, and if Kinect sales are anything to go by, there are A LOT of them out there.
I think it's a very smart move on MS' front, but because PSN is free for online play, Sony should give the PS4 cross game chat, lag free video streaming, free Youtube and other music or video apps, then advertise the living daylights out of the savings when there's no subscription needed!!
Or Sony should offer the same deal with a 2 year PSN subscription, but outline the free games in the deal, whereas with MS you only get online play. THAT will really persuade parents, core and casual gamers!!!
A $99 PS3 with free games every month on a PSN subscription VS $99 360 with online play and no free games on Live.
Which looks better to the consumer there? 😉
i wish manufactures would start renting out systems instead.
have a weekly payment for a certain device you want instead of having to go and spend 400+ bucks on it!
for instance say you really want to play halo 4 but dont have a 360, well why spend the cash buying it just for 1 game when you could spend 10 bucks renting it for a week or 2 then take it back?
you can rent games, so why not the consoles they run on?
It's a brilliant move by MS. Yes, those who are using this aren't saving any money whatsoever. However, from what I've read, MS is upfront with the costs involved so they're not lying or being deceptive. It's up to the consumers to see if spending more over the long haul is better for them than spending more up front.
I wonder what happens if some stupid kid gets his console perma-banned during the two years. Is the contract null and vcid then?
In the early termination part of the program, it says that if the Live ID is banned from XBL, the person has to pay the early termination amount, which is based on the number of months remaining on the contract. I would think if the console itself is banned and not the Live ID, there'd be no charge as the account would still be considered active, even if it's not being actively used.
probably has to pay the early termination fee
Sirloin beat me to it
Just a little correction, the 4GB isn't a hard drive. It's actually 4 GB of internal flash storage, which I bet you already know.
hmm. Risky. It could ignite a price war with Microsoft at a time when Sony is having major financial problems.
Actually, I didn't. Thanks for the clarification.
From GameIndusty International…..
Xbox 360 at $99: "Great for Microsoft, not for consumers"
By James Brightman Mon 07 May 2012
Analysts described the pricing scheme from Microsoft as a "sucker deal"
Microsoft today unveiled a new business model for its Xbox 360 console, subsidizing the hardware at just $99 by requiring purchasers to sign a two-year contract to Xbox Live for $15 per month. The idea to subsidize a video game console is potentially good, but this initial pricing may be too blatantly a "sucker deal" for some consumers, analysts said.
"Microsoft could gain some additional market share and Xbox LIVE Gold subscribers with a deal like this, but the offer doesn't hold up for consumers who do the math," Billy Pidgeon of M2 Research told us. "At current prices the offer would save the buyer about $200 on the hardware, but XBL Gold is currently $5 per month. Increase the subscription price by $10 a month and the consumer pays for the hardware break in the first year, but is tied into the service at the same high rate for an additional year. Great for Microsoft, not so great for consumers."
Read the "full" article here:
http://www.gamesindustry.biz/articles/2012-05-07-xbox-360-at-USD99-great-for-microsoft-not-for-consumers?utm_source=newsletter&utm_medium=email&utm_campaign=us-daily
Get now, pay later. It's the American way =p
So true.
I saw this coming a mile away. Didn't expect it so soon though. Particularly for a gaming console. MS is shifting towards the inevitable digital future that will dominate all technology. It will no longer be about the BOX. It's all about the Service. In ten years just about any device will be able to run high end games and media.
This is all about LIVE. It always has been since the first XBox. That is what locks customers in. It is an investment in time and community. Live is basically a Social Network. It has features that sites like Facebook and Google+ have implemented (Sharing, Pictures, Video Chat, Music etc..) but with a major lead in the gaming sector.
In the future companies will be giving away hardware just to get people to subscribe to their services. It is a battle for the consumers attention and wallet. I do not hate Microsoft at all for doing this. I myself won't buy into it but from a industry standpoint it is ingenious.
once again business intervenes another craft for profit.
I didn't know it was $15 a month for Live Gold with the $99 Xbox 360. Thanks for clearing that up.
After doing the math, in the US, you pay about $5 per month for Live Gold, and a 4GB Xbox 360 costs about $199 USD. That's $319 altogether to buy outright and subscribe to Live for 2 years.
The deal is $99 for the 360 and $15 per month for Xbox Live to pay it off. 15 x 24 = 360, add the 99 and you pay $459 all up after the 2 year contract to Live Gold.
You're paying an extra $140 for the same product over the 2 years!!!!!!
If that is the case, I'd rather save my pennies for any console and buy it outright than be suckered into a high interest payment option over 2 years.
If the extra paid wasn't THAT high, I would be far more interested in that deal. But because I'm not a dumb sheep who sees a cheap price and a cheap monthly payment option equalling to more money paid in the long run, I think I will stick to buying consoles and paying for Live as I use it.
This deal is clearly aimed at people who know nothing of financial management. Thank God I do!!
Last edited by Dancemachine55 on 5/8/2012 8:54:13 PM
… 4GB Xbox? 4?! GB..?! I don't think Sony should do anything. It's a shame they didn't come up with this nifty idea on their previous stepping with the larger cores and widespread RROD. That would TOTALLY make this an authentic comparison to cell phones. Toss in an insurance plan that'll void your warranty by removing the hard drive's seal. Perhaps a moisture detection pad right on the power button so your sweaty palms inflict "damage" to your seal. As if the price to product ratio doesn't do you in.