Xbox discounted with Microsoft subscription
Microsoft is experimenting with a new mobile phone-style contract to sell its Xbox 360 video games consoles.
The pricing strategy is currently only available in 17 Microsoft stores in America and offers the entry-level model of the console bundled with Kinect voice-and-gesture sensing controllers for $99. Buyers must however also subscribe for two years to the Xbox Live Gold online service for games, films via services such as Netflix, music and play. Including the total monthly subscription fee at $15, the total cost is $460 over time, compared to $420 up front.
Microsoft will also charge a $250 early termination fee. Previous discounts, however, have offered the console and the Kinect controller for substantially less that $420.
Released in 2005, the XBox 360 is struggling with declining sales, although the release of new accessories such as the Kinect Controller and a constant stream of new games have maintained its position as the number one video games console.
The new approach, modelled on the contracts offered by mobile phone companies, is also designed to increase numbers of subscribers to the Xbox Live service, which offers additional content for gamers as well as the ability to play online. Although mobile companies have used the model to encourage users to upgrade their phones regularly, Microsoft hopes it will be able encourage more buyers into physical stores, rather than to buy online. Sales both in the UK and America have increasingly moved to web stores, and subscription-based gaming services such as Onlive have also provided challenges.
Revenue at the company's Entertainment and Devices Division dropped 16 percent to $1.6 billion in the recently ended quarter.