May 03

What does Xbox 360 and Verizon have in common? Well they both provide a service where you buy a device at a discount with a two year contract. that’s right, Microsoft will start selling the Xbox 360 at a discounted price so that you, the consumer, can have it on the cheap as long as you pay a monthly fee for two years. Is this deal worth it and will other companies like Sony and Nintendo follow suit?

First, what do you get out of this deal? You get a 4GB Xbox 360 with a Kinect and one controller for $99, which already sounds like a sweet deal… But here’s the catch. You MUST sign up for a monthly fee, which includes their Xbox Live Gold membership, for $15 a month. That may not seem so bad on the surface, until you do the math. You can get Xbox Live Gold with a years subscription, pretty much anywhere, for $60. You can even get a family plan service with four members getting Xbox Live for $100! So, $60 for one year of service… divided by 12 months equals $5 a month!

Ok, you may feel like you’re getting ripped off here with this $99 Xbox deal… but it gets worse. Now, without doing the math you can justify that $10 more a month for the big discount you get on the Xbox. Until you do the math again. Ten additional dollars a month for two years equals $240. Adding the price you paid for the discounted Xbox and the $15 a month equals $459 in all. Taking a quick look on Amazon brings up the same 4GB Xbox you get with this deal for $286, and found in most stores for $299. If you bought this same Xbox on Amazon with Two years gold membership it would be $406 all together.

Hm, so you can either save the cash now and get a discounted Xbox or save money for a few weeks/months and get the normal prices Xbox. In the first instance, going for the discounted Xbox, you’re paying more than $50 in the long term. While saving money up to buy the regularly priced one saves you $50. to some, the immediate ownership of an Xbox may be enough to pay extra each month. But consider this as well. This deal is ONLY through Microsoft’s online store, which means there is no middle man like Walmart or Amazon to give money to. This means this extra cash is going right to them and some thing Microsoft should offer a bigger discount, or lower monthly fee, because of this.

So should we expect other companies to do this? Sony has a service like Xbox Live, but you don’t need it to play or purchase games online, it’s just a premium service. While Nintendo has a free online service. I wouldn’t be surprised if Sony offered something like this in the future, when it was clear how much profit Microsoft made from this experiment, but there is no reason Nintendo would jump into this kind of deal.

Is this a scam though? Would anyone be willing to do such a silly thing? If your a “hardcore” gamer, then you would probably pass up this deal. Most gamers know that the Xbox360 has been around a while and Microsoft has been whispering about a new console possibly appearing in 2-3 years. But other folks out there may not see this as a bad deal, and it really isn’t that bad in the long run. Overall you’re paying only $50 more, and that’s spread over a two year span. While if you have $100 in your hand right now, you can get a 4Gb Xbox with Kinect and Xbox Live immediately. Which is great for someone with not a lot of disposable income each month which is how all cellphone providers have been doing it for over a decade.



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