This week Microsoft officially announced a $10 increase to the annual Xbox Live Gold subscription. Most analysts were not too surprised by this, believe the added features over the last year justify the price hike, and that Microsoft's Xbox momentum should not be affected by the move. But where does Microsoft go from here? How much can they charge and what will they offer?
In a special Pachter's Podium last year, Wedbush Morgan Securities' Michael Pachter correctly predicted the $10 increase and he said a $100 plan might very well be in the cards. Now that the price actually is being raised, we decided to check in again with Pachter to see what his thoughts were on Xbox Live pricing and the future of the popular online service. Regarding being correct about the increase, he began by joking, "Yeah, even a broken clock is right twice a day."
As for Xbox Live's future, the great thing about the $10 increase is that it will enable Microsoft to reinvest in the service to then offer even more enhancements. "The extra $10 translates to around $100 - 150 million per year in additional revenue for Microsoft. I think that they will reinvest at least this much in developing other new applications, and will roll out a premium service with $100 - 200 million worth of enhancements," Pachter told IndustryGamers. "If they can get 2 million users to switch from the $60 plan to the $100 plan, they'll make an extra $80 million a year, and can keep investing to try to grow that business."
He continued, "The Xbox 360 can work as a media center, and conceivably could do things like managing a music library. Although Apple and Microsoft aren't the best of friends, I could see Apple letting Xbox Live members manage their iTunes accounts through their 360s, and other such premium services. I'm not the guy to speculate as to what they will offer (for example, I didn't even know ESPN 3 existed before it was announced for the 360), but I'm sure that there are many talented and creative people at Microsoft working on such a plan right now. For all I know, the Platinum plan might include virtual goods credits for various Microsoft games. If members could get specialized Halo armor or weapons worth the extra $40, they might be more willing to sign up, and it doesn't really cost Microsoft anything to offer things like that."
We also asked Pachter about the possibility of the Xbox becoming more like a cable-box with IPTV or similar functionality, but the additional features will come more gradually, he believes. "As far as other media center applications, I think we'll see baby steps on IPTV before we see a full roll-out of a cable-like service. More channels like ESPN 3, perhaps they will offer HBO Go or something similar. There are a lot of emerging services like Hulu, Epix, perhaps a premium YouTube service. I think that the possibilities are limitless, although it's a bit early to speculate on what precisely they will offer," he said.
8 Comments
August 31, 2010
I would gladly pay $100 per month for xbox live! I mean for only $100 per month I get everything that other consoles give you for free AND x-game chat! You just can’t beat it. Make us pay $200 per month and I promise not only will you keep the customers you have but many more will be banging on your door just to give you their money.
You PS3 owners say you get to frag for free, well, that don’t mean shit to us because we get to pay to frag! That means every frag we get is worth cash money! Can you trade in your K/D ratio for OFFICIAL bragging rights(future feature of xbox Live Platinum +++) on your console? Didn’t think so. So for all of you who say you get everything xbox offers for free except x-game chat you should just buy an xbox right now and pay for online play because we all know that you feel better about yourself as a person when you pay to play!
Remember free things suck! If you don’t have to pay for it, it just isn’t worth shit!
August 31, 2010
Like I said in the other price increass thread, Microsoft really needs to set up different tiers for XBL beyond just gold(paying) and silver(non-paying) members. They need to have it where someone like me gets a $3-5 discount off of my yearly $60 membership for every part of XBL I don't use and those I don't want included(such as facebook, twitter and the upcoming ESPN app).
I'm sure I'm not the only XBL gold member not interested in these(and other apps) so I really shouldn't have to pay for those. Also, Microsoft started a rewards type program for certain members of XBL about a year ago and quickly got rid of it. They need to bring that back. Those are pretty much the only issues I have with XBL right now.
August 31, 2010
So....MS wants to increase the price for the XBL Membership AND possibly offer a "Platinum" version. That is fine; however, game production companies such as Activision and EA are looking into Pay-for-Play pricing arrangements for their games. (Think of WoW pricing.)
In fact, Activision has stated that for some of their upcoming Call of Duty games they want to charge a monthly rate. I'm already being charged for MS's "Gold" XBL service. I don't think that I should have to pay another company a monthly fee ON TOP of my XBL service in order to play a game online that I have purchased.
The only way that I can see this "Platinum" service level being a good deal at $100/year is if I don't have to pay 3rd party monthly fees!
August 31, 2010
If this succeeds correctly, such as all the extra features being no charge, such as Hulu, ESPN, and other apps, with the higher memberships then Microsoft has officially turned Xbox Live from a small niche thing into a full fledge Utility like a Water Bill or a Cable Bill. Good Luck Microsoft, Your going to need it cause I don't see pa Time Warner just taking this laying down.
September 3, 2010
is there going to be a "Platinum" service level in the uk and want willwe get
10 months ago
It Would Be Good To See It. With something like ps3's PSN Plus Installed, Would be good to see.
9 months ago
OHH OF COURSEEE when sony comes out with playstation plus microsoft comes out with something just like it, EVERYTHING microsoft made was copied from someone else, xbox from dreamcast, zune from ipod, windows from mac os, kinnect from eye toy. heres whats going to happen: they know its not original but they are going to advertise the shit out of it to make it look like it is, happens everytime just watch
8 months ago
sniperboy shut your mouth. Not all of that is true but even if some of it is they make it better. Zune is not great but iTunes it amazing it's really hard to beat iTunes. Actually if there wasn't good competition in the media market then everything would look like shit. Video Games, software, firmware, hardware everything because no one is putting pressure on the company. If Zune or Rhapsody didn't exist then iTunes would be horrible and so would the iPods. If Windows didn't exist than linux, os, etc. would suck. Actually eye toy failed because it was a terrible hardware feature. Kinect is actually becoming a success because unlike eye toy Microsoft actually put the time into it to make it great.