Why a subscription-based console is a no-brainer
Note: This article was written by freelancer Shane Bailey. If you would like to learn more about getting paid to freelance for Xbox Enthusiast, please check out this page for more information.
Back in May 2012, Microsoft introduced a subsidized Xbox 360 bundle to the North American market. An Xbox 360 4GB SKU cost $99 with a 24-month Xbox Live Gold subscription at $14.99 per month, equaling just shy of $460. Later that year, the platform holder expanded the deal to include the 250GB model as well, but in 2014 pulled the plug on the program calling it a “pilot experiment”.
Microsoft spokesperson David Dennis told The Wall Street Journal, “This program was intended to be a pilot experiment from the start, and Microsoft routinely adjusts the mix of offers available to its customers and this change was simply standard business practice.”
At the time, many members of the gaming media believed that Microsoft was testing the waters for the Xbox One to see if a subsidized subscription model for it’s next console would be viable. Speaking with Gamespot in September 2013, Microsoft director of product planning Albert Penello said he believes the program might reappear a few years down the line.
“The subsidized model really makes a lot of sense towards the end of the life[cycle of a console]. People are more price sensitive,” Penello said at the time. “They are more cost conscious. It’s a model I like; I’m sure we’ll bring it back. But not right now.”
Looking at the current landscape of the video game industry, and in particular Microsoft’s situation, I believe it makes perfect sense for the company to reintroduce this model right now.
An Xbox One console with a 500GB HDD currently retails for $349 and to subscribe to Xbox Live Gold for two years costs an additional $100 (probably closer to $80 if you do a bit of shopping around) coming up to $429-$449.
If Microsoft were to sell an Xbox One for $99 with a 24-month Xbox live Gold subscription at $14.99 per month, identical to its previous model with the Xbox 360, it would cost consumers $460; an extra $10-$30 over the course of two years.
So, why would this be a compelling reason to buy an Xbox One this way? Two reasons: Backwards Compatibility and Games With Gold.
Announced at its E3 2015 conference, backwards compatibility of Xbox 360 games on Xbox One will be arriving later this year. It’s an attractive feature for a wide variety of gamers as the dozens of games they may still own on Xbox 360 will most likely be made compatible starting later this year. A new Xbox One that plays the dozens of games consumers already own for the initial cost of $99 is attractive already.
Games With Gold on the other hand, the promotion introduced mid-2013 that now gives Xbox Live Gold subscribers four free games every month, would make this subsidized model even more valuable. Combined with backwards compatibility, Gold subscribers will no longer need a 360 to reap the full benefits of Games With Gold; they can simply download the free 360 games onto their Xbox One consoles. This subscription service would essentially guarantee customers four free games a month for each month that they own the console, an excellent deal for new adopters.
What’s great for Microsoft is that it is able to tailor the monthly Games With Gold offerings to best suit its needs, like offering the original Gears of War trilogy in the months leading up to Gears of War 4’s release in the holiday of 2016. This tactic would drum up hype and maximize interest for upcoming releases while giving gamers something for “free”.
Microsoft is still struggling to catch up with the PlayStation 4 nearly two years after launch, and despite it’s best effort to create ‘the greatest exclusive line-up in Xbox history’, the fact is that the PlayStation 4 is riding a huge wave of goodwill that doesn’t seem to be slowing down. The Xbox team needs to do something creative if they want to get back in this race. The notion of marketing a $99 Xbox One that will give owners 96 free games over the course of two years for $15 a month is a very exciting one at that and I think Microsoft could benefit from introducing such a bundle sooner rather than later.
What do you think? Would it behoove Microsoft to release a $99 Xbox One console? Let us know your thoughts in the comments section below!