24Oct 2012

Microsoft unveils new subscription-driven Xbox bundles, more evidence of next gen strategy

Subscriptions are "pivotal to our business"

The future of Xbox will be smartphone-style hardware subscriptions, if recent developments at Microsoft are any indication. Following the success of its $99 Xbox 360 pilot programme earlier this year, the manufacturer has announced new bundle deals at Toys R Us and Walmart, available from 28th October and 29th October respectively.

The deals in question are a 4GB Xbox 360 with Kinect bundle or a standalone 250GB Xbox 360 for $99.99 upfront, or for a "limited time" a 250GB Xbox 360 with Kinect for $149.99 upfront. Buying locks you into an extra-special two year Xbox Live subscription of $14.99 a month.

Click to view larger image
As many have noted, the total cost rounds out to more than what you'd pay if you coughed up full price for the hardware and a standard issue Xbox Live subscription. The counter-argument is that people don't mind paying more providing they can pay over time, hence the success of the smartphone biz.

The programme isn't currently slated to make an appearance outside America, but recent comments from Microsoft's Phil Spencer leave no doubt that the option is in the air going forward. "We've seen good uptake," he said in June. "We're just moving out of a trial on that. But it's... I think there are opportunities like that to continue to try to hit all price points."

Microsoft's general manager for entertainment marketing reinforced the idea this week, in an interview with the Wall Street Journal. "We wanted to see if we would get sustained consumer excitement and willingness from partners to get this in retail," he said. "This type of program is pivotal to our business."

Which may be why the firm is seeking a (deep breath) director of value proposition and subscription strategy to "[drive] our subscriptions business, which is core to our company's strategy and profitable growth".

"We have become the industry leader and face great opportunities and challenges as we expand from gaming to entertainment," notes the blurb, adding that "today Xbox LIVE is a large, passionate community with tremendous engagement. Competition is more fierce than ever, and we are investing for strategic growth."

Would you buy a next gen Xbox supported by subs, or are you an old-fashioned all-costs-upfront kind of guy?

Comments

18 comments so far...

  1. Personally i think the idea of paying less for the console but then pay a subscription each month is wrong. I still believe that the best system would be to buy the console out right and then have some online service separate. If Microsoft include the option to but any future console outright then that will be ok but if they force you to go down the subscription road i know a lot of friends that would not buy into that!

  2. I love how they quote the price in US dollars, makes it look like a good deal.

    Until you see the UK prices.

  3. I like the idea of options. Not everyone can afford to purchase a console outright. I see this as no different than a mobile phone contract really.

  4. Now Microsoft are making multiple millions every month in advertising revenue on the dashboard, people have been saying "Hey - maybe now they'll make Xbox Live free to everyone!"

    Here's a clue: no, they won't.

  5. I like the idea of options. Not everyone can afford to purchase a console outright. I see this as no different than a mobile phone contract really.

    This exactly. Why people are up in arms against an option is beyond me.

  6. I like the idea of options. Not everyone can afford to purchase a console outright. I see this as no different than a mobile phone contract really.

    This exactly. Why people are up in arms against an option is beyond me.

    Exactly. Don't comment on something you don't agree with. Just ignore it. By all means praise things, but why be negative? There is literally no point in a contrary opinion. Switch off your browser and go for a walk.

    Some people...

  7. I like the idea of options. Not everyone can afford to purchase a console outright. I see this as no different than a mobile phone contract really.

    This exactly. Why people are up in arms against an option is beyond me.

    My only concern would be, what if Microsoft don't give you the option? What if the next console is subscription only? I could see it happening. I remember when the 360 was launched, and Game would only sell you the console when bought with a 7 game bundle costing around £600-700.

    If demand is high enough and they are clever with the distribution, buying the console outright might not be an option.

    (I really hope I'm wrong! :? )

  8. My only concern would be, what if Microsoft don't give you the option? What if the next console is subscription only? I could see it happening. I remember when the 360 was launched, and Game would only sell you the console when bought with a 7 game bundle costing around £600-700.

    To be honest, I don't remember that they did. I bought my 360 from GAME on release day and whilst it was in a bundle it was nowhere near that sum.

  9. I like the idea of options. Not everyone can afford to purchase a console outright. I see this as no different than a mobile phone contract really.

    This exactly. Why people are up in arms against an option is beyond me.

    I suspect its the notion of paying more over a time than one would if bought outright. But that's naive as most people with car credit, a mortgage or a mobile will be aware.

  10. My only concern would be, what if Microsoft don't give you the option? What if the next console is subscription only? I could see it happening. I remember when the 360 was launched, and Game would only sell you the console when bought with a 7 game bundle costing around £600-700.

    To be honest, I don't remember that they did. I bought my 360 from GAME on release day and whilst it was in a bundle it was nowhere near that sum.

    It was definitely the case in Hull. I remember they had the Core pack for £600 and the Premium Pack for £700. They came with about 7 games (mostly rubbish like Fifa 06 World Cup)

    Maybe just a Hull thing?

    Anyway, my point is. Maybe if demand is high enough, it may be subscription only with no option to buy outright. I read Sony are keen to use the same kind of subscription model for the PS4. :shock:

  11. I can't imagine that would happen for a second. You can buy anything outright if you have the money, subscription just means more people can afford it even if it's more expensive over the long term. Like a mortgage for a slightly off kilter argument.

    And thos, my argument is against people who just instantly look for negative points without thinking anything through. This isn't 'generic evil corporation' steals money from the poor. Or maybe I should just chime in with 'f**k M$' to be completely balanced.

  12. As long as this is only an option, and not the only way to buy, then i'm fine. I wouldn't go the subscription way, simply because i'm buying my console, when i buy it, i shouldn't have to keep paying. also i don't play online all the time, i tend to get the 3 month gold account because i live with my partner and she uses the internet while i play. so i can't really play online all year.

    however if people feel this is a good idea, i wouldn't like people like me to ruin it for them, so hopefully, it will be an option.

  13. And thos, my argument is against people who just instantly look for negative points without thinking anything through. This isn't 'generic evil corporation' steals money from the poor.

    Agreed.

  14. I can't imagine that would happen for a second. You can buy anything outright if you have the money, subscription just means more people can afford it even if it's more expensive over the long term. Like a mortgage for a slightly off kilter argument.

    And thos, my argument is against people who just instantly look for negative points without thinking anything through. This isn't 'generic evil corporation' steals money from the poor. Or maybe I should just chime in with 'f**k M$' to be completely balanced.

    I agree too. I'm not knocking the subscription idea. I actually think as a business model and as a way for the less wealthy to pay for a new system it sounds pretty good, as long as prices on both fronts are reasonable.

  15. All up front and cheaper. no more.

  16. I just hope the rise of the pay monthly model isn't a sign that MS remembered the lack of interest in the PS3 when it launch with such a high price and anticipating that the nextbox will follow suit have opted for this option to try to avoid a slow uptake.

  17. Subscription options would in the past be a no from me. I would prefer like some to buy it up front.

    However in a world recession where many parents like myself find money to purchase games for my kids/myself more of a luxury now than ever before, subscription offers make sense.

    You have to consider that the US economy is still struggling to get going, the UK economy is facing a double dip recession and as for the rest of europe, Spain has unemployment figures around 25% of the population, Greece, Ireland and Portugal are only a little better.

    So any next gen console launch over the next 18 months or so which I assume will open at a high price point must provide as much flexibility on purchase options/subscriptions as it can to maximise sales/market penetration.

    IMO a subscription option makes sense and I would see it similar to a phone contract. However I do agree that the should be the option sill for those who have enough spare cash after pay day to pay for it outright to do so if they wish.

  18. As has been pointed out before, some people will complain just for the sake of it, but then there are those who are genuinely worried about the way things may be going. Like a few others on here, I am married with kids, mortgage and two f**king cats, so I don't get to go on the Xbox that often, and only play online a few times a month. I'm not going to pay £15/£20 a month for that. I can see why MS want to do it, and for some its a great a idea. But there needs to be the option to buy it the old fashioned way.