$99 Xbox 360 with a catch

Couchpotato

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As early as next week, Microsoft Stores could have a new 4GB Xbox 360 bundle with Kinect that costs a mere $99, reports The Verge. This information comes from unnamed sources, who also say that this console will include a monthly cost of $15, which customers will need to pay for two years to avoid an early termination fee.

Wait, what? That doesn't sound like a particularly worthwhile deal. It does get slightly better: the monthly subscription is said to come with access to Xbox Live Gold, a two-year warranty, and "possibly some additional streaming content from cable providers or sports package providers.

So what does everyone think good deal or bad?:)

Link-http://www.theverge.com/2012/5/2/2993600/99-xbox-360-kinect-subsidized-bundle
 
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Oh I remember this sales model. They did this before back in the early 2000's; it was a heavy rebate for signing up for a 2 year MSN ISP contract that made some super-low end and "internet appliance" sub $99 or free at checkout.

http://www.theregister.co.uk/2001/02/05/why_microsofts_msn_pc_give/

If at first you don't succeed, do the same thing over and over again and expecting different results? Ok the Xbox 360 isn't exactly an MSN internet appliance
 
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Oh I remember this sales model. They did this before back in the early 2000's; it was a heavy rebate for signing up for a 2 year MSN ISP contract that made some super-low end and "internet appliance" sub $99 or free at checkout.

http://www.theregister.co.uk/2001/02/05/why_microsofts_msn_pc_give/

If at first you don't succeed, do the same thing over and over again and expecting different results?

I almost forgot about that. I'm sure a few people will take this offer though. It's just like a phone contract with termination fees. I'll admit it's a good business move but I'm sure it will fail just like the one in the link.
 
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The 'catch' is you have to become a console owner.

EDIT: Ah nevermind, the 2 year for sixty dollars price I got was a special promotion.

Alright so it's not as completely awful as I thought. With the way Xbox Live pricing stucture is set up now then this does end up being a good deal if:

1) It isn't reasonable for you to save up and buy the console+XBLG up front
2) You don't have a credit card but don't mind service contracts which can pose similar risks to your credit score and can balloon if you have late or missed payments.
3) If you have a credit card, you either have a very high interest rate and/or could not pay the balance off relatively quickly.

Outside of the US and much of Europe I know there are some countries where interest rates can get as high as %240 - and credit is increasingly difficult to find in some countries even if the rates are capped. Still, the best analogy for what they're doing here is creating a package for the "sub-prime" market in a sense - those whose location or financial situation precludes more advantageous ways for them to pay for it. I'm wondering what sort of percent of new accounts they anticipate go delinquent?
 
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hey I'm a console owner and glad and very happy about it! Of course, I use my PS3 99% of the time as a media player :)

so you have to pay $15/month for 2 years? nice, so that makes the Xbox cost $460 LOL NO THANKS!
 
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Not a bad deal if you plan to get XBox Gold anyway.

I wonder if this is a pre-emptive strike against the rumored PS4? If the 4 comes out before the new XBox, this might keep a few people from jumping over to the "new hotness" long enough for Microsoft to get it's new console out - or at least heavily hyped.
 
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Not a bad deal if you plan to get XBox Gold anyway.

I wonder if this is a pre-emptive strike against the rumored PS4? If the 4 comes out before the new XBox, this might keep a few people from jumping over to the "new hotness" long enough for Microsoft to get it's new console out - or at least heavily hyped.

Well they have been stepping up their attempts to compete more with Netflix, Hulu Plus, Itunes, and other content delivery/streaming services. What ammounts to a higher subscription cost and comes with access to additional content which would otherwise not be availible or be availible only for purchase fits with that. It sounds like they're using this to - put past their saturation of the console market at at current price points (besides natural growth in market size) and simultaneously promote a subscription based content service that might be like netflix+gametap.

It will also probably help with some very important international markets going forward, such as Brazil and China. For consumers in Brazil, the option to put it on a credit card and pay it off in 8 months does not end up being less expensive. The average interest rate there is somewhere around 200%. In China, credit card useage is relatively low partially due to the extremely high individual savings rate as various prominent cultural aversions to debt.

Perhaps they hope that this sort of model may prove more enticing in regions with a growing middle class but where credit is either exhorbitantly expensive or considered generally undesireable compared to savings. While functionally very similar to other forms of financing, a service contract like this may bring the purchase price within more people's reach while bypassing dysfunctional credit markets and avoiding stigma attached to more obvious traditional forms of debt.
 
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