Monday, May 07, 2012

Microsoft Confirms Subsidized $99 Xbox 360 Is It A Good Deal?

Rumors that Microsoft would soon begin selling their Xbox 360 for $99 have been laid to rest today as the company has confirmed the details of a subsidy plan that offers customers the chance to get the popular gaming console for $200 off its original retail price if they are wiling to pay $15 per month and commit to two years of online service.

Upfront the deal might sound really appealing to consumers but you should ask how much is it going to cost in the long run!

I've never been a big supported of subsidized plans. I've always found that you can typically get a better deal in the long term by paying the higher upfront cost and shopping around for whatever the service is you'll be contracted to use. On the face of it many deals sound great, however with a little shopping prowess you might be able to save yourself some money or the need to be locked into a contract.

So lets beak down the Xbox 360 deal

Initial rumors indicated that the deal might mean that customers signing up for a 2 year subscription to Xbox Live Gold Membership at $14.99 per month would "possibly get some additional streaming content from cable providers or sports package providers." As it turns out that is not going to be the case. The service is the exact same Xbox Live Gold plan that you can buy à la carte for $60/year (or less, if you shop for deals online). So this means customers who are looking to pay $200 less for the Xbox 360 and Kinect hardware are required to pay a total overall cost of $460. This would end up being $40 more than the avg user would pay for the same bundle with the same 2 years of Xbox Live Gold service if they paid the regular upfront cost.

Now the nice side is you won't have to pony up the $299 upfront cost for the hardware. But on the downside you will still be required to maintain that 2 year subscription no matter what or face the potential of up to $250 in early termination fees (ETF). If you pay the $299 upfront cost, you would still have the option of either not buying,canceling or not renewing your Xbox Live Gold plan and could save even more.

So while the deal might sound great for the short term, in the long term it might not be the best option.

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