Stop Confusing Us about Microsoft Deals

So, you read about the new deal being offered by Microsoft for their XBOX 360 with Kinect and are thinking of taking advantage of it. But you are having trouble still deciding on what this deal will actually cost in the long run, and whether or not it will fit your needs. Some people have been leaving confusing comments about this subject (because they have misinterpreted the deal, or they wish to start trouble for trouble’s sake) and this write-up is done in the hope that the confusion can be dispelled.

The deal is this, you pay $99 up front and sign a two-year contract (similar to when you buy a phone with contract), during which you'll be paying $15 a month for an XBOX Live Gold Account.

Math time: $99 + ($15 x 24-months) = $99 + $360 = $459

 
Now obviously, for people that don't have the money to go out and buy a new 4GB XBOX360 with Kinect at retail cost:

Full Retail pricing: $300 + (2 years x $60) = $300 + $120 = $420

This could be exactly what they need to get started with the XBOX 360. With the overall cost difference being only $39 this appears to be a very smart move on the part of Microsoft. And even when you factor in the cost of additional streaming options like HULU or Netflix, the monthly bill will still only run about $15-$40 depending on selections.

Okay, now for the savvy consumer look.

First, anyone that has been using or scouting the purchase of an XBOX 360 knows that a system with only 4GB of space won’t be enough for the needs of most families. With the abundance of games that need to store game data on the drive, 4GB is going to be gone through quickly. I feel it’s also important to mention that the Kinect will need more space to save the snapshots and video of your actions it can take during the course of playing your games, in order to share it with your friends. If you choose to take advantage of this deal, then you may find yourself in need of a new hard drive within the first 3-6 months to expand your media library options. The upgrade is a simple enough process, but depending on your needs, it could still cost from $70-$150 to complete. Looking at the higher cost for both we see that it could be:

With Contract: $459 + $150 = $609

Without Contract: $420 + $150 = $570

We see that this doesn’t really alter the overall cost of the deal versus retail, but it is an important thing to consider when looking at investing in an XBOX.

Second, how many people actually spend $60 on a 12-month Live Membership? Most people search online for deals and can get a single user Gold Membership for $35-$45. Here is a strong reason for not going with the contract as we can see here:

With Contract: $459

Without Contract (and with savvy shopping): $300 + (2 annual Memberships x $35/45) = $300 + $70/90 = $370-$390

There is a $70-$90 difference between them now. You could take that money and apply it to a harddrive upgrade, gaming headset, or extra controller. Knowing this, it appears the smart decision would be to pass on the new deal.

But for those of you who can’t get your hands on $300 and want to play a gaming system that has continued to give the Playstation 3 a run for its money in graphics, games, and online offerings, take the deal and have some fun.