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A $99 Xbox In Every Home, Microsoft Hopes

An article from The Verge (citing unnamed sources) today announced that Microsoft will be offering a new subscription-based Xbox 360 package. For $99 and a two-year, $15 a month, contract, gamers will get a 4GB Xbox console, Kinect sensor, and a Xbox Live Gold subscription. Customer’s will also be covered under a 2-year warranty, and from what we see, could have access to exclusive streaming content from cable and sports providers.

This is intended to compete with the likes of Apple TV, Roku, and other media consoles0. This new Xbox model, like cell providers, will lock users into a 2-year contract with an early-cancellation penalty fee. Will we also get some some credit for a machine upgrade after these 2 years?  We could be seeing this subsidized Xbox in stores as early as next week.

This new plan could be foreshadowing the future of the video game market.  It will market the Xbox 360 as more of a complete living room media center, rather than just a video game console; with current online entertainment applications being more popular than online gaming. Also, instead of taking a loss on the console and profiting off video game sales, companies will subsidize the console only to make a significant profit off the yearly subscriptions and video games sales. This could cause some serious issues with gamers as now they will have pay for the hardware, service subscription, and constantly purchase new video games since future consoles may not accept used games. Could we see an uprising like we did when Microsoft increased Xbox Live fees 20%?

At around $459 this model has a slightly higher price point than a current similar  set up (Xbox Conole + Kinect + 2-yr subscription) which costs around $420. Whether the increase in price is worth it will depend on what extra features and content are offered to monthly subscribers.

This article comes shortly after another describing Microsoft’s post-Zune era music service code named ‘Woodstock‘. Designed to be “Spotify-like” this service will also allow users to share and build playlists with friends. Woodstock is  supposed to be announced at this years E3 Conference  alongside the new Windows 8 platform and Windows Phone.

What do you think? Which model would you prefer? How do you feel about potentially being locked into a video game console like a cell phone?

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