Xbox Live Pricing

IG: You said not too long ago that Microsoft would raise the subscription price on Xbox Live to $100. Do you legitimately think they could do that without losing a chunk of their members? Wouldn't Microsoft be better off providing a free option that offers online gameplay and other features at no charge, similar to PSN, perhaps supported with more ads on the network?

Pachter: I think legitimately that $50 is really cheap for Xbox Live.  I doubt that they’ll raise price $50 more across the board; rather, I expect that they’ll raise the price by $10 or so for the “gold” membership, and strip out a few features from gold and add them to “platinum” for $100 or so.  Gold members will decide whether to upgrade or drop out.  While I think that they will certainly lose some members, their overall revenues will rise, fueling the addition of even more value added services.  I think that the fact that prices haven’t risen since 2001 should be an indication to their subscribers that prices are going up in the future.  I threw out $100 as a stalking horse, and don’t actually know where prices are going, but know that they are going up.