One strategy that Microsoft has done with the Xbox 360 is subsidize the cost of the console, and then have the consumer pay monthly for the Xbox Live service. This is the first time that a home console has done this price modeling. So far, according to Microsoft, it has been a success. Matt Barlow, Microsoft’s general manager for interactive entertainment marketing, has deemed this model profitable and claims it will be ”pivotal to the business”. With this statement and other obvious indicators, there is a strong possiblity that “Durango” will be primarily sold in this manner. Microsoft will subsidize their box, the “Durango”, and have the consumers pay every month for the service, Xbox Live. Here are a few reasons this seems logical.
Reason One: Price of The Console
From rumors, it seems Microsoft is throwing in the whole kitchen sink into their next product. Edge recently reported rumored specs in their article,”The next Xbox”. The article states, “ Xbox games will be manufactured on 50GB-capacity Blu-ray discs, Microsoft having conceded defeat to Sony following its ill-fated backing of the HD-DVD format….our source has also confirmed that the next Xbox’s recently rumoured specs are entirely accurate. That means an AMD eight-core x64 1.6GHz CPU, a D3D11.x 800MHz graphics solution and 8GB of DDR3 RAM. Unlike Nintendo, Microsoft is continuing to invest heavily in motion-control interfaces, and a new, more reliably responsive Kinect will also ship alongside the next Xbox.” I’m not a computer whiz, but I do understand that these components and the possible installation of Kinect will make this a very expensive console. Analyst, Michael Patcher, recently stated in the interview that the new Xbox may cost more than the PS4 because of Kinect and other features. I can’t really picture Microsoft selling a baseline console at around $400-$450. It does not make sense at that price. What does make sense is Microsoft will probably have the new Xbox valued at $500, but if you sign a “contract” you can buy their system for $200.
Reason Two: More Interest In Services
Microsoft has really seemed to be more interested in services than actual games lately. I am sure their studios are working on some launch titles, but for the most part I believe Microsoft is more concerned with Windows 8. They have recently advertised their updated Xbox Music/Video, Apps, and connectivity services. Also, there has also been rumors that the new Xbox will have a tv turner. Microsoft seems to be going all in as a media center.
Conclusion: Predictions
The new Xbox will overall be more “expensive” than the Playstation Four. It will have the components to stay competitive with the Playstation and will also have the updated Kinect. This will allow them retain third party support and they will be able to keep the “casuals” on board with the new console. They will subsidize the price of the console to $200-$299 IF you buy into their Xbox service plan. There will probably be a tiered subscription service. Gold will still be needed to play online and to have access for media apps. Microsoft will also probably add a whole new “Diamond” category. Diamond will have all the perks of the Gold service, plus it will have DVR and cable capabilities. “Durango’s’ killer app may not be a game at E3, but a cable service. If Xbox worked with a provider like Comcast or Dish, you could have cable/premium channels and all of Microsoft’s service for one price. This will bring Microsoft closer to being a media box in the living room. This strategy could work for them, especially in America. This type of subsidizing has been lucrative for Apple in the phone business. I would not be surprised if Microsoft wants to find out if it will work for them in the gaming business. They may lose some gamers if the tiered system and the watermarked disc rumors are true, but if they go in this direction they will not care about those gamers. They will be banking on the average family not caring about those features. Parents will buy the “Durango” because they can watch cable and use the media services. They will also buy it to occasionally play Kinect with their kids and play Call of Duty: Whatever. Microsoft will announce their new console shortly so we will all see what their next move will be.
Yeah! you might be right but does that mean psn will not be free anymore right? Do you think Playstation such a great system will not start charging people money for there service. This is a business they have to make there money some how that’s why Xbox has been successful with live. Another point that I want to make out is when playstation 3 was release they had a Bluray drive in the system in which had 50 gigs of memory and played hd movies.At the time there slogan was It Only does everything meaning played movies which meant it was not only a game system but a entertainment system Microsoft then contoured by streaming with netflex and buying digital movies first. Now Playstation is doing it now and believes CDS are dead who’s doing the right thing now Also the next xbox will have a bluray drive I don’t see see cable box with a bluray player.
I believe Microsoft and Sony will have more differences than commonalities this generation. It is still up in the air, but lets look at the information that has so far been “leaked”. It makes no sense to have a game console that is always connected online in order to play it. It also makes no sense to have watermarked disc as well. What Microsoft is probably thinking is, by having third publishers back, they can block used games and in return receive more “exclusive dlc” to advertise. The millions of gamers who buy Call of Duty and Halo will still buy the disc regardless so it will not affect those consumers. Next, by being always connected online they can have your tv service and kinect working together. For example, let’s say Dave sits on the couch and Kinect can recognize it’s Dave. Kinect then could turn to ESPN without even asking Dave because Kinect knows Dave always watches ESPN. These will be the features I think Microsoft will talk about, we will see.
Which is why I think Sony did their research and revealed their stuff first. They want to let everyone know that the Playstation Four is for developers and gamers. They probably sense Microsoft will go after the casual demographic, and Microsoft may win that sector. The last thing Sony wants is for any of the “hardcore gamers” to jump on Microsoft bandwagon as well. So expect Sony to keep online free. They will most likely have a tiered service just like Microsoft. Online and Netflix will probably stay free, They will have Playstation Plus, and then “Playstation Ultimate” or whatever they want to call it for Gakai, Cloud Streaming, Music Unlimited, Etc.
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Your sources is full of shit ! Next xbox CPU will most likely be power pc since the CPU was fabbed at IBM and Global foundries. With that shit tech inside next xbox, it’ll be dirt cheap even without subsidy, will sub, it will force Sony and Nintendo out of biz since Sony wanna start charging for their premier online service(they said is tier based).
Where are your sources sir? I just listed sources from a reputable gaming magazine. The specs I listed have been floating around for a long time. The specs that were revealed for Playstation 4 were accurate compared to the rumors. More than likely, Xbox will match up with the rumored specs as well. Also please explain to me how Microsoft will have these supposed cheap specs. The system alone would be around $350 at the cheapest, but when you add a new Kinect to every system, this will definitely raise the price to some degree. Again, these rumors are based on speculation until Microsoft officially announces their console. I seem them heading in this direction based on their recent marketing and business decisions.
This could mean mean they’ve also sold millions of units in advance in contracts with television content providers before the device officially launches. Excellent strategy!