The PS4 and Xbox 720 should have subsidized, on contract options
A lot of gamers have laughed at the idea of purchasing a subsidized Xbox 360 console and paying $15 a month for the duration of a two-year contract just play to video games. I don’t blame them, the idea of doing that for the Xbox 360 in 2012 is a bit silly, though it does lower the initial price of entry to lower income families even if they end up paying more in the long run.
Why not purchase the 360 for $199 outright? But next-gen consoles subsidized on contract? I think that may be just what the doctor ordered.
We all remember the PS3 launch. $599 for the model everyone really wanted. Sony packed a lot of value into that $600 machine, but they took massive losses on each unit sold. Microsoft sold the Xbox 360 at a loss during it’s launch in 2005 as well.
Every gamer with access to the internet can be seen constantly posting about how the Xbox 720 and PS4 should have X amount of RAM, or Z clock speed on a four/six/eight-core processor.
These things aren’t cheap guys. Unless you want another $500+ console launch I don’t think it’s reasonable to expect Sony and Microsoft to launch next gen consoles in 2013 (or beyond) with 12GBs of RAM and other cutting edge tech. I’ve always been one of those guys that thinks Sony and Microsoft should sell their consoles at a profit from day one so they can put more money back into game development, but I doubt they will change those ways in the near future.
But we could get the massive upgrades over current-gen tech that we all want. We’d have to pay a hefty price out of the gate for the PS4 and Xbox 720 if we get the hardware specs we say we want and that may not be the best thing for the industry or our wallets.
I suggest that Sony and Microsoft should release their next-gen consoles individually, for sale at their high prices. Let’s say $500-$700. But hold up, you say that’s too much money for you.
The easy, and somewhat predictable solution is for Microsoft to expand upon what they’re already doing with the Xbox 360 and for Sony to join them in adopting a cell-phone like business model for their consoles.
Imagine walking into a retailer and picking up the PS4 of your dreams, with all the processing power you could desire for $200? Sounds good right, well I think a lot of people would purchase next-gen consoles earlier in their lifetime if they were closer to sub-$300 prices.
I think everyone can agree that consoles don’t really take off (sales-wise) until they hit $299 or less. Sony and Microsoft could launch next-gen consoles with tech that pushes them near $600 on their own but sell them to us at a massive discount with a contract.
Would you be against buying a PS4 with all the horsepower you can dream of, 2 years of free games from Playstation Plus all for $299 with a contract that requires a $25 payment every month? Some people would be, but I think a surprising amount of consumers would be delighted by this change in console pricing models.
For reference there are plenty of people who pay nearly $20 a month for access to Hulu Plus and Netflix. I don’t think Sony and Microsoft would have much trouble with a monthly payment plan so long as the payment stays below a certain amount, say $30 or so.
Furthermore, since these consoles would be subsidized you would also run the chance of benefiting from retailer sales that discount the console even more. Retailers like Best Buy and Wal-Mart often discount cell phones even more so than the actual carriers do in their own stores. Chances are that if you walk into a Best Buy right now you can probably buy the latest smartphone (excluding Apple’s newest iPhones) for $50-$100 less than at Sprint and Verizon.
So perhaps the Microsoft or Sony Style stores would sell you PS4 and 720 units for $299 but Best Buy could run a temporary sale letting you score a next-gen console for $199.
I think this is the direction the industry is moving towards. Launching a console at the $500 or higher price point is not something that usually works out well. Can you imagine if the PS3 had stayed $599 throughout 2008 instead of having the $399 40GB unit hit stores shelves in fall 2007?
The best way to go about this is have the consoles available for purchase two ways. One way allows lower income consumers to purchase the console on contract for half the price it would cost normally, the other lets hardcore gamers who want to avoid monthly payments to purchase the device outright at a higher price should they be willing to do so.
Of course this all depends on the hardware. In order to accept the monthly payment system on home consoles I think people would expect a gigantic leap over current consoles and it would be up to Sony/Microsoft to get this right.
Would you purchase the PS4 or Xbox 720 on contract given they possessed a huge leap over current generation tech? Or do you want cell-phone like contracts to stay as far away from your console gaming as possible? Leave a comment below with your thoughts!