So, yeah. I called it. Sure, it was just shy of 10 months ago, but I did predict that Microsoft would increase the price of Xbox Live (XBL) subscriptions… and here we are.
The increase occurs on November 1st, which is just before the release of Microsoft's Kinect camera and associated hardware bundles. It's a blatant attempt to cash in on these new users while raising prices for legacy consumers at the same time. At least Microsoft's giving legacy consumers a chance to "lock in" one more year of the service before they're subject to the increase. Speaking in terms of absolute business, it makes sense since Microsoft is expecting (hoping) to attract a ton of new, more casual users with the Kinect launch… so upping the ante means extra profit for Microsoft right away… if the consumers bite.
From a consumer standpoint, especially for legacy consumers, questions are sure to be raised. What else are consumers getting for their money to justify the extra $10? Why raise prices now, especially considering that Sony's competing service is free and the PlayStation 3 has steadily been gaining momentum? Any increase also causes consumers to reconsider their use of a service; how often do users play online, and is it worth the price of a full retail release every year? Each individual's mileage is going to vary, but it's going to be tougher for some to justify paying more every year.
What really gets me is the discussion about the increase that's been going on via Twitter. There are two distinct camps. One side is genuinely frustrated about the increase and openly wonders what the increase is for. The other side uses the same general argument that the "Industry Defense Force" has been using for their "War on Used Games" argument: It's only $10 per year or less than a dollar per month; if you can't afford that, maybe you shouldn't be gaming. What's worse about this is that there are reputable members of the gaming press out there on the Twitter service who are not only siding with this argument—but actually putting it out there. I'm not going to name names or drag anyone into the mud here, but it seems painfully obvious that the industry and its associated press seem to stick together on issues like price increases, used games, and other decisions that adversely affect the consumer.
Let's look at some of these Twitter arguments, shall we?
You guys are nuts if you think a $10 boost is a problem. Put aside entitlement and realize how much you get for that $.
Again with the entitlement argument. Really? We're so damned entitled that we've been paying the $50 all along, right? Where does this come from? We don't have to be "entitled" to anything, I suppose, if we just stop paying Microsoft for a service that's being provided comparably elsewhere for no fee at all. See, if you want to talk entitlement, you can address PSN users who may complain about that service, which is free—although it does have its share of issues. Legacy consumers have been paying Microsoft, so I move that they have a right to complain and even cancel subscriptions if they think that the price hike is not justified.
People need to stop whining so much; it's just $10.
Indeed. I mean, why would anyone complain about an increase, right? After all, as consumers, we should just lie down and take it. While we're at it, when game prices go up another $10 or more, let's send an additional check for $10 to the publisher. After all, games are worth it! In fact, we don't pay enough. You're right. I will stop whining immediately. After all, it's just $10. Along with the extra $10 we pay for new games now, the $10 Online Pass, $15 DLC map packs, and… oh, wait. I'll stop whining. Really.
Stop bitching about the XBL price increase. Its no big deal. Its not like its $100. $60 is a reasonable price for the service we get.
Yes. $60 is not $100. It's also not $50, either. If you feel that $60 is a more "reasonable" price, then feel free to send Microsoft the extra $10. The "big deal" is that Microsoft is raising prices in the midst of an economy that's on the brink of a double-dip recession. If the industry wants to keep console gaming relevant as a source of entertainment, they aren't going to do well by increasing prices across the board on almost everything from hardware to software to online functionality. They may still keep a decent amount of hardcore gamers, but the general consumer is in the process of being disenchanted—and the fiscal numbers prove it.
You know what? Maybe all of this "bitching" that I'm doing is for nothing. After all, there are still many people who are obviously more than happy to pay more for their video game habit. The industry has become powerful enough where a full-blown crash just won't happen, so even when the more casual consumer base decides that enough is enough when it comes to raising prices on everything—hardware, software, accessories, online functionality, and DLC—there will still be a small but potent base of potential buyers out there who will keep console gaming from complete life support. The unfortunate reality in this mess is that the casual consumer base is what catapulted console gaming from something you did in your parents' basement to a legitimate form of entertainment that rivaled movies in terms of revenue. The industry will never get those people back, and, as a consequence, has taken an immeasurable step backwards.
But it's only $10, right. Keep telling yourselves that.
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- Consoleation: The war on used games—Xbox One, Consumers Zero - June 8, 2013
The article is overly critical. The interesting debate is not the morality of Microsoft’s pricing decision, but simply whether or not the new price point is too high. It’s a free market for goodness sake! Companies should be free to set prices as they see fit, much as consumers are free to purchase accordingly within their budget, much as you are free to voice discontent! [quote] The “big deal” is that Microsoft is raising prices in the midst of an economy that’s on the brink of a double-dip recession.[/quote] Invalid argument. Video games sales decrease during a recession, but the… Read more »
as long as M$ continues to hold online-multiplay hostage by keeping it attached solely to ‘Gold’ level memberships, they can and will continue to raise the price.
i have my limit but Live for me as it stands right now is worth $5 a month.
[quote]if you can’t afford that, maybe you shouldn’t be gaming.[/quote] I don’t see what’s your problem with this argument. It’s the only argument when it comes to our market system. and you yourself wrote it: [quote]…it’s going to be tougher for some to justify paying more every year.[/quote] your main misinterpretation of the system lies here: [quote]decisions that adversely affect the consumer[/quote] The decisions have been made by the customers, the group you seem to try to defend from the “evil companies”. They only can make proposals, nothing more is in their responsibility. If no one had ever paid Live,… Read more »