Microsoft is planning to launch a subsidized Xbox 360 Kinect bundle for $99. Will you buy one?
Rumors are showing up today that Microsoft is looking to release a new Kinect bundle next week at a subsidized price of $99. This will get you the Xbox 360 4GB + Kinect + 2 years of warranty + 2 years of Gold membership for $99 on a two year contract. There is reportedly some extra content but nothing has been specified yet as to what the content is. The caveat though is that there will be a $15/month charge which will also have an early termination fee attached to it. Oh yeah and for the time being they will only be sold at Microsoft stores. Let's break this down real quick (using full retail pricing):
Xbox subsidized bundle + 15/month fee = $460
Xbox Kincect bundle (300) + 2 years of XBL (60) + 2 years warranty (50) = $470
The savings ends up being roughly $10 over a full purchase. While it's not a blockbuster amount in savings it does provide some flexibility for people who want to buy an Xbox but don't want to plop down the full amount of money for everything. This is largely similar to what PC manufactures did in the 90s by giving people a computer, essentially for free, if they agreed to sign up for an internet service for two or three years. This is also something we're all too familiar with when buy a cell phone.
I think a few questions can certainly be raised from this.
Is this deal worth it in any capacity with sales always happening?
Will consumers care and look for a local Microsoft store to take advantage of it?
Does this mean that a new console from Microsoft is not as close as people think?
I guess to know how well this will work, we need to know some statistics on how many people use layaway to buy consoles in the US. I would imaging that anyone who would normally buy a console on layaway would happily choose this option instead.
This might also make the 360 more attractive to kids whose parents refuse to buy them a new console. At only $15 per month, they only have to mow one lawn per month to pay for it (saving up the extra from each job to cover the winter months).
To be honest, I have an original (from release day) 360 that has RRODed once and was covered under the warranty extension. I have been debating whether or not I will send this thing in for the $100 repair fee when it finally dies again or whether to just live without the XBox since I can't really afford to fork out for a new system. However, seeing this news has changed my tune a little. For that same $100 I can pay the up-front cost, and I can possibly justify $15 per month. I'm not saying this is a fabulous option, nor that I am definitely going this route when mine dies, but it does add a decent option to keep me in the XBox ecosystem at a price I can possibly justify. (Disclaimer: I don't want Kinect anyway, so it might make more sense to do an interest free 6 month Best Buy credit card purchase of the core system)
As far as how this reflects on the timeline of the next XBox... I don't think you can draw any conclusions. Keep in mind that all indications are that the next one will use Intel processors, so backwards compatibility is going to be a problem and may not be included. Even if it is, they will still sell both systems in parallel for at least 1 year before phasing the 360 out. When my original XBox died, I bought another one for $100 during the 360 era so that I could continue playing Halo 2 with my friends who had owned their 360s for several months at the time. If they leave out backwards compatibility, they may keep selling the 360 for even longer. Microsoft is never one to bandon legacy support too readily. :)
I think you nailed it when you said "This might also make the 360 more attractive to kids whose parents refuse to buy them a new console. At only $15 per month, they only have to mow one lawn per month to pay for it (saving up the extra from each job to cover the winter months)."
Seems like a nice option for those who can't plop down the hundreds of dollars up front. Though, that's only going to be from Microsoft Stores, so I'm not sure if many will go out of their way just to find one of the few MS Stores out there.
The main thing I get out of all this is that Microsoft's really trying to get Xboxes in as many houses as possible, with Kinect specifically, and that the Xbox brand itself is really becoming less and less about gaming.
Microsoft really just wants the Xbox to be the new must-have set top box for your TV. It's been rather clear that that's the direction for a while now with them focusing on getting more media apps on Xbox Live, but something like this further proves the point. There's been several rumors now about MS having a smaller, disk-less Xbox 360 bundled with a Kinect that's used primarily for media streaming functionality for about $99. Something along those lines. While that rumor has come and gone, this new one about the subsidized bundle seems to follow the same idea.
Does this mean that there won't be a new Xbox coming soon enough? Who knows. At this point, it's hard to say, but never rule it out. There's been constant rumors about a newer Xbox coming, and frankly they pretty much need one: The Xbox innards are essentially 7 years old now. Not to mention that Nintendo's starting off the next-gen race with a head start later this year, and neither Microsoft nor Sony wants to be behind. Who knows; Unlike last time when the original Xbox was killed off quickly in favor for the 360, maybe there will be an overlap between systems. PS2 has still been selling ever since the PS3 launched. The 360 has gained a lot of momentum in sales recently thanks to Kinect, and I don't think they'd necessarily want to hinder that. They'd probably want to help encourage it and announce a world-wide price drop real soon instead of just a subsidized offer at their select stores...
You bring up a good point about MS wanting to get Xbox's in households which means they still believe in. Which is why I'm inclined to say there is no new console coming soon, at least until holiday 2013. The Xbox continues to impress me with it's graphic quality for it's age so it makes sense for them to keep riding it out for another 12-18 months.
I think they can ride it out for even longer. Given the fact that iOS devices are overtaking the game market, it's clear that the number of people who care about photo-realistic graphics is rapidly diminishing. The fact that people continue to buy the Wii is proof enough of this point.
I think for most the initial decision will go beyond the up front cost vs total cost. I'm seeing this as Microsoft's play into the home entertainment arena.
I have two questions that initially came up when I saw this, 1. Will Xbox Live be for 1 user or will this be a Family pack and 2. What additional content will I get.
I can deal with the answer to question 1 being, yes for just one user, but lets consider this. Will Microsoft give me, lets say, 10 games per month of MLB premium or 20 hours of Netflix streaming...and so on. I think the additional content will be the make or break of this deal and will keep you coming back for more once your two years are up. At least for me, this seems like the better deal. Can Microsoft offer me something more as a cord cutter? I for one, hope so.
FYI: MLB.TV does one free game a day so you can technically get 30 free games a month.
If the content is more in line with what PSN+ gets you then the deal gets much better but I feel like they might spin it the way they do now where XBL Gold gets you access to certain areas silver doesn't.
It you want a Kinect I guess I could see this as a good deal, however, 360 has been around so long now that refurbished 360s are available just about anywhere at super cheap prices. I bought 3 refurbished 360s over the past 2 years, and gifted them to friends that didn't have 360s, I wanted to play online games with. Those were only 99 bucks each, none of them came with a hdd though, however you can pick up a used 20 gig hdd for like 10 to 20 bucks, and Microsoft gives a 1 year warrenty on all refurbished consoles, however, neither of these 3 consoles have had a problem since their purchase, and they all have at least 3 or 4 hours of use a day, one of them has had much more than that, considering my friend uses it a media box all day long as well.
Also, to save them on Xbox Live, I purchased a family pack, and let them just pay me the 25 a year each for their live subscriptions. The Family Pack option is nice, and I'm sure if you play xbox you have at least 3 other friends on there, that would be willing to split the bill with you. There are some downsides to the family pack, as in only the main account holder can put a credit card on his account, everyone else has to get the main account holder to give them points or buy Microsoft point cards themselves and use the codes, with that said thou, no one in my group has really had a problem with that. And 50 bucks for 2 years of XBL is much better than 60 a year.
What I'm really trying to say is I just don't see this being a very good deal, while the Kinect being there does up the price quite a bit, I mean really it's a Kinect, yeah, when it first came out, having friends over and playing dance central was alright, but mostly it just sits there and collects dusk, really it was 150 waste of money, and honestly, it doesn't it work that well.
It's not a bad deal, it allows you to spread out your purchase price if you can't afford it up front, let's face it, if you've got an Xbox 360 you're probably going to want gold service anyway so it's not a horrible deal. If you think this is a good deal, you would probably look for a Microsoft store for it. I don't expect Microsoft intends to release a new console for a couple of years yet, if not more.
You can buy a used Xbox 360 with a game or 2 for $100. Kinect is not as popular and people HATE early termination fees and contracts. This is not a steal, but a way to get Kinect for free and a way to ship the new Xbox to customer instead of the older version.
I'm happy with my PS3 and none of this sparks my interest.