What Does Microsoft's Offer of an Xbox 360 With Contract Imply?

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Xbox 360 CouponIt appears that the rumors are true that suggest Microsoft is evolving the model of console ownership. This coupon offers a 4GB Xbox 360 with a Kinect Sensor for $99 and a two-year commitment to maintain an Xbox Live Gold Membership at $15 per month. This is a model familiar to cell-phone users, and while the 4GB model won't satisfy hardcore gamers for long, this does seem like a way to get a different type of user (particularly those interested in the entertainment and set-top-box functions of the console) to join the fold.

We at FI question two aspects of this offer: First, this offer seems particularly appealing to those who can't easily lay out the cash for an Xbox 360. If this offer is exclusive to Microsoft stores, those tend to be in areas with substantial disposable income and customers more likely to spend upfront than to enter a long, liability-laden contract. Second, this offer is emerging toward the end of the console cycle. Does that mean Microsoft hopes to leverage all contracted console owners into purchasing the next console (at an upfront discount while extending their contracts)? This part is pure speculation, but is this also an indication that Xbox consoles might be incrementally iterated more frequently, and require a hardware upgrade every year or so, in the manner of the smartphone market? This reeks of paradigm shift if it's anything more than a throwaway experiment.

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This page contains a single entry by Editor published on May 7, 2012 3:06 PM.

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