By now you’ve probably heard about the “$99 Xbox.” First reported by The Verge, the rumor basically states that Microsoft may have plans to release an Xbox for cheap with a two-year contract.

Calling it a $99 Xbox is a tad misleading, as it requires a monthly payment along with the contract, but the math is simple.

Xbox + Kinect + 2 years of Xbox Live Gold = a total of $460.

If you were to piece them together, it would actually be $420 (although you can find deals on 12-month Gold cards. You just have to look at the biggest online retailer out there). A lot of commenters on some of the various sites talking about this are complaining that it’s actually more expensive to go this route, complaining about the “hidden” costs and whatnot. You’re basically spending more money on a machine that might be on its way out before you finish the contract.

I get that.

And I agree; in this day and age, with all of the various monthly charges many of us already incur, this seems insane. Think about it for a second. Many of us have cable, internet, Netflix, cellphones, cellphone-data-plans, and Xbox Gold memberships. That’s already a good chunk of change. That list right there could easily be between $100 and $150. Or more.

But.

What about the people who for one reason or another (*cough* RROD after warranty *cough*) don’t have an Xbox right now? Could this be a good deal for them? I know that the argument that it’s more money in the long run is logical and mathematically sound. I get that. It might be that we’re looking at this the wrong way.

First: The article says:

We’re told that the two-year subscription will provide access to the Xbox Live Gold service and possibly some additional streaming content from cable providers or sports package providers.

“Possibly some additional streaming content”? I know that’s a little vague, and this is still a rumor, as Xbox has said that they don’t comment or speculate about rumors, so there you go. It’s all hearsay, right? Don’t count out the possibility that someone is throwing out this to see what kinds of reactions happen (I have absolutely zero proof of this statement; I’m just saying it’s possible.). But going back to the additional content statement, maybe the $15/month charge will be like a Gold+ membership or something…

Second: Don’t forget that some people don’t have $400 laying around to throw down on a new console (especially if it’s to replace a broken one). So what are your options if you don’t have that kind of money? A refurbished Xbox? Sure, if you’re brave. What about a credit card? That seems easy enough, right? But if that’s your avenue, and you were to only pay $15/month, that’d be basically the minimum payment, and it’d probably take six or eight years to actually pay the thing off (I’m not an accountant, but you get the idea).

Third: What if this is a sly, sneaky way to make it look like they’re discounting the Xbox as they make their transition to the next console? Well, people are smart enough to see around that. Believe me. You can’t throw a rock on the internet without it hitting a comment string where people are discussing at length the real cost of the subscription plan. I don’t think that people are that stupid to actually think that it’s cheaper (I mean, it is cheaper, but only when compared to financing it). If they’re trying to be sneaky, then screw them for thinking that we’re a bunch of morons who can’t do simple math. It has to be something else…

Fourth: What if they’re simply re-orienting the Xbox’s position as not simply a gaming console? It’s not a traditional pricing scheme that we, as gamers, are used to. We pay for the console once, and then we plug it in. Period. In an LA Times blog article from late March, it was stated that, “Microsoft’s Xbox 360 video game console is now used more for watching movies and TV shows and listening to music online than playing video games online.” So it would stand to reason that they’re not selling it as just a gaming console. This is something akin to a Roku player or an Apple TV. Oh yeah, and it plays games, too.

Fifth: It’s only got a 4gb harddrive! What the hell, man? Seriously? That’s like a Wii. If you wanted to install Mass Effect 3, you’d need about 12.4 gbs. That’s a wee bit bigger than the 4gb available. What about downloading all of those movies and games? Yup. One at a time. One at a time. So go buy a new harddrive… Wait, that’s more money…

Sixth: The rumors state that Microsoft would sell the package at, “its range of Microsoft Stores in the US.” Wait, there are Microsoft stores? Well, there are 21 right now. Not exactly a corner-big-box-store kind of deal I guess. There again, it could be an attempt to bring people into those stores. I didn’t even know there were Microsoft stores before this, so hey, I guess that’s a good move in a way.

I don’t think that this is necessarily the biggest announcement in gaming, but it could usher in a new string of creative-pricing strategies for consoles. This sort of thing might be necessary as the consoles beef up their hardware. If the only choice for the next console was either paying $600 once or $99 plus $21/month for two years, I know which one seems easier to swallow (and which one would be an easier sell for my wife).

What do you think? Are they up to no-good, or is this the first of many contract-based consoles?


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