Microsoft ends its Xbox 360 $99 subscription business model

Microsoft's efforts to offer a different business model for selling its Xbox 360 game console have officially ended. The Wall Street Journal has received a statement from the company saying that Microsoft no longer sells the Xbox 360 for $99 up-front combined with a two year contract for Xbox Live for $14.99 a month.

Microsoft first launched its subscription model for the Xbox 360 in May 2012 at a number of its retail store locations and later expanded the effort to other stores like GameStop, Best Buy and others. The model actually cost consumers more money over two years compared to paying full price for the console and then buying two cards with 12-month subscriptions to Xbox Live.

In Microsoft's official statement on the shut down of the subscription option, a spokesperson said, "This program was intended to be a pilot experiment from the start, and Microsoft routinely adjusts the mix of offers available to its customers and this change was simply standard business practice." The story also quotes Lewis Ward, an IDC gaming analyst, who claims that Microsoft told analysts in 2013 that the Xbox 360 subscription model was a way to sell a few more units of the eight year old hardware. Ward said that Microsoft wanted to squeeze "the last 10-15% out of the potential market."

Source: The Wall Street Journal | Image via Microsoft

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13 Comments

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Blackhearted said,
Was there anyone who even wanted to use this kind of plan? I mean, if you do some simple math it's quite a bad deal.

No kidding, it works out you're paying and nearly an extra 50% over the two years.

$99 + ($14.99 * 24) = 458.76
$199 + (2 * $60) = £319
Difference: $139.76

Majesticmerc said,

No kidding, it works out you're paying and nearly an extra 50% over the two years.

$99 + ($14.99 * 24) = 458.76
$199 + (2 * $60) = £319
Difference: $139.76

That difference can be even bigger when you account for the fact that you can frequently find deals for gold at like $35 or $40 a year.

Majesticmerc said,

No kidding, it works out you're paying and nearly an extra 50% over the two years.

$99 + ($14.99 * 24) = 458.76
$199 + (2 * $60) = £319
Difference: $139.76

Yeah it's a terrible deal - but it's the same as most things on a contract. They do it to appeal to the people who don't have the money to buy things up front, and charge them for the privilege

Chicane-UK said,

Yeah it's a terrible deal - but it's the same as most things on a contract. They do it to appeal to the people who don't have the money to buy things up front, and charge them for the privilege

If they can't afford the few hundred bucks on the hardware I wonder how they would afford the games

LogicalApex said,

If they can't afford the few hundred bucks on the hardware I wonder how they would afford the games

They could wait til the price drops down on the games or they can rent games at the rental centers such as video stores.. even you can buy used games for low price.

LogicalApex said,

If they can't afford the few hundred bucks on the hardware I wonder how they would afford the games

Preowned? Borrowed from friends?

Well - another great US only offer I guess. Wonder how that didn't work out in the US. The land where financing stuff is the best thing ever

I suspect we will see announcements from one or more cable or satellite TV company where they offer a similar deal. Put $99 down and get an Xbox One setup with free Xbox Live if you sign a 2 year agreement. The cable companies have tried everything under the sun to stop cord cutting and this makes the most sense for why Microsoft not only are discontinuing this pilot program, but why they sold their Mediaroom business. This way they will not be in direct competition with their cable partners.

Well that little experiment went nowhere. Hopefully MS learned something that could be beneficially to them in the future. Perhaps a subsidized Xbox One could still happen if bundled with something other than the hardware.