For most global phone users, subsidized hardware is pretty uncommon. Of course the positive to paying $300, $400 or $500+ for a phone is that you also get it unlocked and sans monthly contract, free to roam until your hearts content. In the U.S., however, things are quite different. Most high-end phones are $200-$300 max. In exchange for cheaper up front costs, U.S. consumers are required to sign a multi-year (usually 2) year contract tying them to a particular carrier and making it extremely expensive to leave before said contract is up. So what does that business model have to do with Microsoft’s Xbox 360? A completely new spin on the gaming industry is about to drop — subsidized gaming consoles.
According to a story by The Verge, Microsoft will announce and release a $99 subsidized Xbox gaming console. The rumored subsidized model will be a 4 GB + Kinect along with service to Xbox Live Gold service and possible streaming options with certain online video providers. The cost per month will weigh in at $15/month. Customers who subscribe to the new plan will also be covered under a 2-year warranty.
On the surface, it seems like a pretty awesome deal. $99 for an Xbox and only $15 for Xbox live (and rumored streaming services). Added up over the cost of a 2-year contract, however, reveals it is roughly the same as a 2-year cellular contract; that is, it is more expensive to go the subsidized route.
For example, a 4 GB Xbox w/ Kinect is $299 brand new. Toss in a $50/year Xbox Live Gold membership for two years and you’re up to ~$399 when all is said and done (and this is without any additional streaming services). Now, take the $99 + $15/month x24 months and you wind up with $459 over the course of two years.
Compared to a cellphone (or other subsidized products/services)d, the added cost isn’t too bad. And if you don’t have $300+ up front for a console, it’s not a bad idea provided you can afford the monthly payments.
While we highlighted the similarities between this new subsidized Xbox plan and traditional subsidized cellular plans, there is also one big difference that makes this a better long-term buy — life cycles. Mobile phones are typically outdated after 6-10 months on the market, and replaced even faster with new models coming out every few weeks. Gaming consoles on the other hand are in it for the long haul. The hardware powering the Xbox 360 in particular is nearing 7 years old.
So we have to ask. Would you subscribe to a 2-year contract for a gaming console: Yes or no?
Via: The Verge