Analysis: Are console contracts the future?

Price promotions are an industry staple, but few have got the trade talking like Microsoft’s latest offer.

The platform holder’s US stores are selling a 4GB Xbox 360 and Kinect for just $99. The catch? It comes with a two-year subscription to Xbox Live, priced at $15 per month, and an early termination fee.

This model is commonplace in other sectors: smartphone handsets are discounted or free with contracts, and media packages like Sky+ come with a free set-top box.

But it’s rarely been tried in gaming before.

[dangert12]

It's sort of happening now with mobile phones and Ps3's/Wii's etc In the package...Or even Brighthouse style contracts...though I wouldn't personal do this ish

[Amazingmrbrock]

It's not in my future thats for sure.

There's thin thing purchasing things where when you have alternatives you can get something else.

That's what I'll be doing. If the next box requires me to get a contract I just won't involve myself with that system. If the next playstation needs a contract I will do the same.

There's always the pc.

[TBM]

I know i will not be ripped off to play my hobby like i im with my cell phone. i will not purchase a console where i have to pay for more in the end when i could just purchase it in full right from the off.

[WeskerChildReborned]

What PS3 or Wii has a contract?

[ShaunCameron]

Exactly. I never heard of such. But I wouldn't be surprised if Sony goes that route.

[dangert12]

I said when you get mobile phones you sometimes get phones In the package so It's sort of whats going on here...or If you go to brighthouse you can get a contract for these sort of things...
http://www.brighthouse.co.u...

and
http://www.phones4u.co.uk/s...

[WrAiTh Sp3cTr3]

I can see this as a win win in some sorts. It means a company like Microsoft can go all out on the specs of their next console and have customers pay the premium price through contractual obligations, which would bring the initial investment of the customer, down to something more feasible. If not, then I suspect next-gen hardware won't be as advanced as some would hope.

[GraveLord]

If you think about it all the successful products out there are on contracts with monthly payments.(Cell Phones and Cars...etc)

[iamnsuperman]

I wouldn't be surprised if this occurs. Think about it. It is great to advertise at a seemingly low price and it is very successful in the mobile market. We will see if it is implemented and more importantly how (really expensive/hidden costs) to see if it is actually beneficial.

[MariaHelFutura]

Remember this. Software is where these companies make most of their money. People usually buy 1-2 consoles and dozen and dozens of games. One day consoles will probably be free w/ a contract (2-5yrs) to the online subscription (just like the 360 and cell phones). They will be required to be online to play and will be disconnected from the network for non-payment. Like I said software is where they make their money, could you imagine if they had 500 million in the wild how much they would make off of a blockbuster game release. Basically the "cell phone business platform" will take over intergrating the payment of the console and the payment of the service into a monthly payment. It probably won't just be videogames that sees this business structure forced into it, the more things that become "connected" will see this happen (TV, Music, CPUs, Etc).

[iGaMei]

What happens if you sign a contract and next year xbox 720 comes out and you want to switch?

[SignifiedSix]

If Microsoft's idea works, most likely!

[Dojan123]

I have a feeling that this will be away to make the 720 affordable to the masses at launch.

[WrAiTh Sp3cTr3]

That's what I was trying to say in my earlier post. With a contract, these companies can build their console with so much stuff that it'll melt our faces, but we won't have to sell our souls to afford them.

[TheTimeDoctor]

all it does is rip poor people off rent-a-center style. it not helping anyone but micro.

[Soldierone]

If its a standard, I will probably stay away from them and go back to PC. This and "anti used" idea scare me. There is a reason I use my phone and keep it until it literally breaks. And when they time comes around the companies with no ties to contracts almost nearly get me.

Honestly with a contract comes all kinds of loopholes, secrets, problems, and whatever. Not saying thats what consoles will do, but look at cell phones.....they are not making billions of dollars off "clean" money, they are making it off screwing people.

Not only do that have to think of people like me, but a LOT of consoles are for KIDS. Don't know about you but I'm not jumping into a random contract just to get my kid a toy.

[Hicken]

For all the talk about how successful cell phone contracts are, there's also a reason that so many companies DON'T have contracts and they do well (Metro PCS, Boost Mobile here in the US). The contract model is successful until a more successful free model can be found... and with gaming, we already have the more successful model. Besides, what's to stop rent-to-own places from buying these systems outright, and then doing the very same thing the console manufacturer would do, but with better financing, or a lower overall price?

[modesign]

NO

[Godmars290]

MS seems to have always wanted a constant revenue stream for their products. XBL has existed since the XBox's conception with the first system, and they were even trying to get people to sign up with online provider service when they had one.

Hopefully this specific instance of the practice ends with them, but we already have an example towards gaming with MMOs.

[MadMen]

god hlp us

[edonus]

I think it will be an option and it is good business. The reason why I cant see it going subscription only is that would mean in order to have a console you need a credit card meaning you have to be 18 to own one. This would mean that kid that saves his chore money wont be getting one, gamers with bad credit wont be getting and people that want to give someone a give and forget gift wont be getting one.

It is still a solid model though.

[Magnus]

If contract consoles become a thing of the future. Then I am going to skip next gen consoles and next gen consoles after those. I will dust off my SNES, Genesis, and every other console I own to play videogames.

[SecretPsycho]

Wasn't this only done with the 360 so they could still get money from it even when next gen comes out?