Why the XBL Price Hike Isn't Actually THAT Bad

Microsoft has announced a price increase for Xbox live effective November 1st, bringing the pricepoint established in 2002 from a snug 50 dollars up to 60. As you might’ve guessed, the reception hasn’t been all positive around the web. Why increase the pricepoint now, what is is justifying it? With resentment, people ask why they should be forced to pay more money for “useless” features such as Facebook and ESPN–why should anyone pay for something which they might not even use?

I’m not here to tell you that these concerns are wrong, because they are valid. Really. It’s your money that’s on the line, and you want to get the most out of your dollar.

At the same time some criticism floating around right now is illogical, there’s little basis for some of it. Ignoring that only shmucks pay full price for XBL–there’s always slick dealin’ going on in the web–let’s think about what the pricepoint really translates to.

Sixty dollars.

That’s five dollars a month. Yeah, seriously. Five dollars for a fast and robust online service.

Yes, you might not use all the features–but couldn’t you say that beforehand, too? How many people do you know that used all of the XBL features? Do you? This is an issue, now?

Let’s also not forget that the pricepoint was established in 2002: that was almost a decade ago. If we take a look at inflation, 50 dollars in 2002 is the equivalent of about 60 dollars in 2010. You’re not actually paying more for it, you’re technically paying the same price.

We also know that there are some incoming improvements, like better voicechat, that our money will probably go toward. It’s cynical to think that the pricepoint is the result of purely, evil/greedy corporate honchos which are simply looking to squeeze more dollars out of their consumers. If this was the case, why would they have waited this long to increase the price? It would have happened sooner.

Now, the real issue is, does XBL offer any actual value to you period? That much, I will concede is arguable. Different people have different needs and expectations. And some people, like PSN/etc users can and will be satisfied with a service that  may not be amazing, but is still good enough. But there’s also clearly a userbase that is willing to pay a little for what they consider to be a better quality of service. Both are valid viewpoints.

And, jointly, the real issue is exactly that: there are different needs and expectations which the current pricing plans for XBL does not satiate. Some players will only use the online component of their games, and some people who will only use Netflix, and just about everything else inbetween. Ideally there would be different packages which offer different components of the current XBL package. This doesn’t exist currently, but the concerns surrounding this price hike have clearly illustrated that perhaps it should.

And that, folks, is the subject of a post onto itself.


  1. LOL

    sugarcoat it however you want, price hike is still a hike. and with the economy being shitty right now.. this is not a good news

  2. LOL

    Whatever you say PSN is better than Xbox live.

  3. ryan

    only retarded fanboys CRY OUT PSN is better or the same as XBL…. Xbox Live is hands down, a better service. Until the psn gets at least, cross game chat, keep your mouth shut.

    I own both consoles but prefer my gaming on my xbox. However, considering the psn is FREE… it is very tempting to consider moving to the ps3. XBL features ARE better, but 60dollars better? That margin is getting slimmer and slimmer. The only thing i care about with the espn deal, is MLB… which won’t even matter til next year. NCAA, NBA… don’t give a f*ck. So what exactly am i spending my extra money on?

    • blu

      Oh yeah, I agree. By paying for the same sevices as PSN for 10 more dollars, we are gettting a sooooo much more superior experience.

      We have sporrrts Na Na Na Na NaNaaa! /s

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  5. Tom

    I mean, it’s smart of Microsoft. They know who their target market is, and their target market will “gladly” pay more money for the same service.

    If I had to make a chart, PSN probably caters to the casual online gamer (like me) who plays 1 or 2 games, doesn’t use voice chat (or thinks voice chat is ruining online games, which I do. Fuckers in TF2 NEVER SHUT UP), and primarily plays things where the missing features don’t matter. I don’t want to talk to the guy I’m playing in Super Puzzle Fighter 2 (Turbo!) or BlazBlue or Street Fighter 4 because I don’t have the time and probably speaks Japanese.

    Whereas Xbox users seem more likely to play a *lot* of games, play tactical first person shooters (no one plays MAG, and that’s all the PS3 really has going for it), and needs voice chat. It’s much more of a social platform, whereas PSN is more of a “you can play games on me!” platform.

    These are players who don’t care about spending more money, because a large percentage of their income/allowance goes to gaming. Another 10$ is not especially significant to them, because…they spend a lot of money on games. Whereas I take my additional 60$ from using PSN only and…buy 60 one dollar games on XNA. Different priorities. xD

  6. Fernando Cordeiro

    I believe that, for the customer, there is no such thing as a good price hike. You can justify it, but paying more for the same product is never preferable to paying the same or less – unless the product we are talking about involves donations, of course. For MS, it will ALWAYS make sense to increase prices as long as they have an inelastic demand – and they most certainly do.

    However, I think that MS’ timing could not be worse and they did a poor job in justifying the price hike – which they have barely justified it at all really.

    Worse of all, MS lost a big opportunity to increase the loyalty and appreciation of its customers considering the world’s economy is clearly not at its best and unemployment is still a big issue. Hyundai, for instance, was able to see its business grow in the US during the worst period of the economic crisis because it guaranteed consumers that they would return their money within a year in case they were fired. Their sales rose and no a single car was returned.

    Microsoft better stop focusing so much on working hard and start focusing on working smart instead.

    • You mean like they’re offering months on XBL for a dollar right now and how they’re selling 12 month cards for 30 until the pricehike? I’d say that’s not a lost opportunity at all. You can buy 12 months for 12 dollars right now, you can buy enough at this cheap price so that you dont have to renew for years.

      • Fernando Cordeiro

        Nah… I see this more as a late remediation that uses the price hike as a pressure factor than an attempt to show willingness to support its customers when times are hard. I meant something that could be done before we even knew there was going to be a price increase.

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