Microsoft reportedly won't offer subsidized next-gen Xbox, will show off IllumiRoom

With the next-generation Xbox's announcement just a day away, Microsoft is finalizing its presentations and announcements. One thing that won't be announced – if a report is accurate, at least – is a subsidized version of Microsoft's next console.

Paul Thurrott, who has broken much of the news about the next Xbox, says Microsoft won't offer a subscription-based version of the console that would subsidize its overall costs despite earlier rumors to the contrary. Thurrott previously said Microsoft was planning on providing two methods to purchase the console: a standard one-time cost of $499 or a cost subsidized through the requirement of a Xbox Live subscription that would include a one-time $299 purchase and monthly $15 rate for two years.

The latter method of purchasing the console has been scrapped, Thurrott said in a tweet, though he didn't clarify further. Thurrott's tweet also mentions that Microsoft Research's IllumiRoom project will be part of the presentation.

News of IllumiRoom's supposed appearance at the event follows a Sunday report from The Wall Street Journal that indicated Microsoft would include "specialized [3D] glasses" that would go along with technology that "blend images of the real world with that of a game." IllumiRoom works by projecting images across a room that work in conjunction with content that's displayed on a television.

Whether IllumiRoom will actually launch alongside the next-gen Xbox is unclear, as Microsoft previously called the project a "proof of concept," and several reports indicated it was relatively early in development.

Source: Paul Thurrott on Twitter

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On the other item in this topic... I really hope IllumiRoom is more substantial than the demo video they released. There is no way that thing will work on my living room without major furniture shuffling, and even then, it doesn't seem that useful, even if companies do go out of their way to include programming for it (doubt it on multiplatform titles).

Zagadka said,
On the other item in this topic... I really hope IllumiRoom is more substantial than the demo video they released. There is no way that thing will work on my living room without major furniture shuffling, and even then, it doesn't seem that useful, even if companies do go out of their way to include programming for it (doubt it on multiplatform titles).

IllumiRoom is supposed to work no matter what your living room furniture configuration looks like. Undoubtedly though it will look better with less stuff surrounding your TV than others.

I'm actually a little worried about new Xbox live gold subscriptions. Right now you can always find them cheap on amazon or buy.com or something. But I worry that they will take back selling rights and force purchase through MSFT at full retail.

Hopefully that doesn't happen. But I think MS won't get rid of the Gold Cards, simply b/c many people buy them as gifts for their kids.

I think MS probably makes more money off the Cards that are sitting at the cash registers when people come up, than the money they lose from people waiting for the cards to be discounted online.

If they restricted to only paying full-price through the Xbox (yes, they would get more money this way), but they would lose out on people that don't have credit cards to pay for Live. This was the reasoning they used to come out with the cards in the first place.

Hm... I thought the subsidized option was a good idea for those that can't afford that much all at once... If true, that's kind of a shame...

I would have been purchasing outright though, so no biggie to me personally...

Though the inclusion of IllumiRoom is REALLY interesting. I didn't think that was anywhere near ready...

Sooo no one seems interested in the lumiroom stuff, seems very intriguing to me with mention of glasses, lumiroom might be projector free now?

duddit2 said,
Sooo no one seems interested in the lumiroom stuff, seems very intriguing to me with mention of glasses, lumiroom might be projector free now?

Yeah, I don't personally care about IllumiRoom... But I'm surprised that it would even be ready...

duddit2 said,
Sooo no one seems interested in the lumiroom stuff, seems very intriguing to me with mention of glasses, lumiroom might be projector free now?

I'm interested. I think it's pretty cool. Although I don't see how something like illumiroom can go projector free. Unless the glasses are google-glass-esque (with dual HUDs instead of just one). I really doubt that though.

just about every rumor about the new xbox has been false. so at this point let's just wait and see what actually happens this week. these "news" site have just about gotten everything wrong from the always online requirement, to the feature set, and now the price.

neonspark said,
just about every rumor about the new xbox has been false.
I would think a rumor is neither true nor false until it has been discredited by a first party source.

I expect Microsoft was concerned how it would appear in the company financials, as it would defer profits to future accounting years. There is also the issue of bad debt, as a certain percentage of consumers simply wouldn't be able to keep up the payments. That said, I think scrapping the plan would be a mistake as it's a business model that has proved incredibly successful for mobile service providers.

Good. Subsidized version was a complete ripoff. $160 more to not spend $200 at the front end. $499 vs $659. I hate when companies try and pass things like this off as a deal. Sadly, people would fall for it.

You forget that the subsidized model would have given you Xbox Live Gold for the entire family. Also, financing stuff costs you more money. This is not new. Every tried to buy a house or a new car?

ILikeTobacco said,
Good. Subsidized version was a complete ripoff. $160 more to not spend $200 at the front end. $499 vs $659. I hate when companies try and pass things like this off as a deal. Sadly, people would fall for it.

its actually $100 more since xbox live is included, but even if its $100 more, that's the benefit you get with not paying the full price up front,and having the benefit of making monthly payments. its still cheaper than putting it on your credit card. You'd get charged at least $200 over 2 years on a standard CC. This is far from being a rip off.

Or you could just get a no interest credit card. Those things are being handed out like candy now.

Also, financing isn't what they called it. Subsidizing and financing are two different things. Either way, it is a rip off.

ILikeTobacco said,
Good. Subsidized version was a complete ripoff. $160 more to not spend $200 at the front end. $499 vs $659. I hate when companies try and pass things like this off as a deal. Sadly, people would fall for it.

You're not factoring in the cost of Xbox Live. Plus the whole time value of money thing...

dagamer34 said,
You forget that the subsidized model would have given you Xbox Live Gold for the entire family. Also, financing stuff costs you more money. This is not new. Every tried to buy a house or a new car?

Exactly. Financing SHOULD cost more. They're assuming YOUR risk... lol

ILikeTobacco said,
People keep throwing the world financing around like it means the same thing as subsidizing.... sigh.

In this situation they are nearly the same thing. Instead of interest you pay a little extra for the convenience of not footing the entire bill at once.

I suspect that the subsidization model was a way to prove to Cable companies that the subscription model could work the way phone subscriptions work for mobile carriers. I think we will also see announcements from Comcast and Verizon for live streaming and a subsidized device model. There may be announcements with DishNetworks, and ATT UVerse since they also had limited interactivity with their products. Microsoft would discontinue their own model to not compete with them would be my guess. We'll know tomorrow.

I think that's actually a bad move. Didn't the subsidized program work out so well that MS took it to a bunch of retailers? I wouldn't have a use for subsidizing the console, but there are a ton of other people that would. I think this is a really stupid move. Subsidizing the console would only increase the user base faster.

I don't think Microsoft wants to create a view of being too expensive out the door that to reach sales goals they have to subsidize. Better to wait until the initial sales have peaked and address pricing / sales concerns to sustain sales post launch.

I worked in retail when the xbox 360 became subsidized. You had people thinking you could buy it for $99, confused as to why they needed a background check, etc.

After about a day, we started telling people not to do it, and within a week we had gotten rid of all of the flyers, and only had 2 small ones in a case, as mandated by corporate.

greenwizard88 said,
I worked in retail when the xbox 360 became subsidized. You had people thinking you could buy it for $99, confused as to why they needed a background check, etc.

You needed a background check to buy into the program? I didn't know that.
After about a day, we started telling people not to do it, and within a week we had gotten rid of all of the flyers, and only had 2 small ones in a case, as mandated by corporate.