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Retail

Microsoft expands $99 Xbox 360 with contract offer

Microsoft expands $99 Xbox 360 with contract offer

Tue 23 Oct 2012 7:44pm GMT / 3:44pm EDT / 12:44pm PDT
RetailHardware

Four more US chains to offer cheap systems with two-year Xbox Live contract in store and online

Microsoft is revisiting and expanding its special pricing program for Xbox 360 that lets consumers pick up a system for as little as $99 up front if they commit to an Xbox Live subscription. After being tested at Microsoft Stores earlier this year, the program will launch at four more US retailers later this month.

Under the program, customers are able to purchase an Xbox 360 configuration of their choice at a steep discount, provided they sign up for a two-year Xbox Live subscription that will cost them $15 per month. For $99 up front, gamers will be able to get a 4GB Xbox 360 with Kinect, or a 250GB Xbox 360 without the motion-sensing camera. Those who want a bundle including the Kinect sensor and a 250GB Xbox 360 can get that for $149 (for a limited time).

GameStop and Toys R Us will begin running the promotion on October 28, with Best Buy and Wal-Mart following suit October 29. The Microsoft Store will also be offering the new version of the program starting November 5. The programs are expected to run in stores as well as online.

While the upfront cost of the system is lessened in this program, it becomes significantly more expensive over the long term. The two-year contract plus $99 console bundle comes to a total of $460, whereas a 4GB Xbox 360 Kinect bundle can be purchased for $249 as part of a holiday promotion. Two years of Xbox Live Gold on top of that could be purchased for $100, bringing the total to about $350.

4 Comments

Bruce Everiss
Marketing Consultant

1,692 594 0.4
This is massively, enormously huge.
Making the Xbox a subscription product like a mobile phone is marketing brilliance. And it forces people onto Xbox Live, which is the real product here.
I see this as Microsoft doing two things 1) Shifting inventory in the product tail by using price elasticity of demand. 2) Getting on the learning curve for the launch of Xbox 720. MS have rolled this programme out slowly so as to iron out glitches. And if the 720 is $99 at launch they won't be able to make enough.

It is utterly amazing that Sony haven't latched on and done the same. They really seem to miss every boat these days.

Posted:A year ago

#1

Craig Burkey
Software Engineer

172 223 1.3
Microsoft really need to look at the services it is trying to provide if they want to make this work, at the moment all they offer is stuff you can get access to elsewhere for free, they need to bring more content inside the xbox brand for this to work, if say it had a Sky or Netflix service included it starts to make more sense. Mobile Phone contracts work because people already pay their phone bill and see a phone upgrade as reward for being loyal, for this to work they need to provide a service people want or already have by another provider with the console being the incentive to switch.

As it is, I hope this is more about a singular xbox profile accross multiple platforms than will result in games I bought digitally for 360 being available on the NextXbox.

Posted:A year ago

#2
People keep saying this is a bad move and expensive but realistically, it enables them to penetrate and get sales from a huge audience who cannot pay $250 up front. Over the 2 year period it works out an extra $100 which is like paying $4 interest a month - much less than lower socio-economic groups would be paying if they borrowed the money or part purchased the machine. It also enables MS to massively lowball the competition but actually make more money per unit than their competitors. Microsoft have the highest attachment rate in the business, their biggest obstacle is getting the machine in peoples homes - this is a big step to solving it.

Wonder when the package with their tablet comes out ;)

Posted:A year ago

#3

Henry Toliver
Network Analyst I

8 0 0.0
For the here and now, it's a GREAT X-mas present, but the long term... It'll cost you a little more than it's worth if you look at the big picture. I dunno, maybe with good execution, it'll reward them in the end. Might get one myself...

Posted:A year ago

#4

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