Could The $99 Xbox Usher In Subscription Based Gaming?

Can’t afford a current-gen console?  Then Microsoft has a deal for you:  A $99 Xbox 360!  That’s right, kids; you can now own one of those $300 consoles for just $99, plus an additional $15 a month for a two-year Xbox Live Gold contract!

Microsoft’s latest offering is aimed at those who don’t quite make enough money to just plunk down three hundred dollars on the table and walk off with a shiny, new Xbox 360.  It makes a ton of sense from a financial standpoint because it opens up a previously unreachable demographic: the lower-income households.  However, this strategy may backfire on them when it comes to game sales.

Developers and publishers have both spoken out in the industry about how used game sales are hurting their profits, and expressed the desire to find a way to eliminate the selling and trading of used video games.  However, the people who Microsoft aims to extend their current-gen console to with this “subscription based offering” are the very same people who will likely purchase their video games used because they can’t afford to pay $60 or $70 for a new one.  If Microsoft’s $99 console program is successful, it will likely increase the sales of used video games dramatically.

So what does this say about our industry?  Obviously, they want to maximize their profits and take our money, but they want to do it on their terms.  If consoles are to go by the way of selling subscriptions in order to reach a broader audience, then they’re going to have to give some ground in regard to used game sales.  Otherwise, there will be tons of people out there that will have a shiny new console, and nothing to play on it because they still can’t afford the new game purchases.

There is another option that scares me: the subscription-based game.  Say (hypothetically) that Activision decided to sell Call of Duty as a subscription-based service at $9.99 a month, and every year, the subscriber would have access to every new Call of Duty game released yearly – as long as they pay their fee.  Now instead of paying $60 for a game, you’ll be paying $120 for the same experience.  Now say that every other game publisher went to the same business model for Battlefield, Mass Effect, Halo, Gears of War, and others.

The offering of subscriptions is beginning to get out of control as it is.  Between Netflix, Zune, and Xbox Live Gold, I’m paying up to $340 a year for basic entertainment services.  Putting the popular games and consoles on subscription services would increase that astronomically.  For a lower-income family, it could rapidly balloon into a burden that they aren’t capable of paying for, and then what happens when they aren’t able to pay the subscription, nor the early termination fee?  A ruined credit score?

Don’t get me wrong, I think that the $99 Xbox 360 is a good idea.  It opens the door to reach tons of people who would otherwise have to wait until the next generation Xbox releases to afford a 360.  But will publishers see this as the opportunity that they’ve been waiting for to finally put a dent in the used games market?  Most likely.  Can we trust them to tread through this new territory with the consumers’ best interests in mind?

I’ll leave that for you to decide.

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