What Does The $99 Pay-Per-Month Xbox Say About Microsoft?

The Xbox 360 is a video game console.

That’s what we gamers have believed since its launch in 2005. It has been a constant source of gaming entertainment for millions of gamers, through the excellent titles it offers (first-party and otherwise) and the online service that revolutionized digital gaming, Xbox Live.

However, while Xbox 360 has been the gamer’s console, Nintendo’s Wii system has been wooing the casual gaming market with innovative motion controls and a strong first-party lineup. Before their recent financial struggles, Nintendo was rolling in money, and Microsoft could see it. Slowly, Microsoft began to look into the ways to cash in on the new breed of gamer Nintendo was creating. Their focus shifted from games to media, introducing Netflix, ESPN, Hulu Plus, and more into the fold. Now, with their newest product, that focus may have shifted too far.

Today Microsoft unveiled a $99 Xbox 360 Slim with Kinect, to be sold at Microsoft Stores throughout the US. While that price tag may be too good to pass up, there’s a reason: the system also comes with a two-year, $15 a month payment plan for Xbox Live on these systems. The plan is to challenge products like Roku and Apple TV as a media streaming device, only with the added bonus of playing video games.

Wait, what?

I thought the Xbox was a gaming device that included all of the other media, not the other way around. I thought Xbox’ major competition was the PlayStation 3 and the Wii. What happened? When did the media experience become more important that the gaming experience?

Granted, the PlayStation 3 also does media streaming like this, but it’s not trying to compete with the likes of Apple TV. Sony uses the tagline “It Only Does Everything” for its system, sure, but they still recognize that PlayStation is about gaming first, then the rest of the media experience. They’re still releasing regular first-party titles, including Starhawk on May 8th, PlayStation All-Stars Battle Royale in the fall, and God of War: Ascension next spring. Microsoft’s only scheduled retail first-party release at the moment is Halo 4.

What’s going on here? It certainly seems like Microsoft is taking a more casual approach to their console. They’re putting their eggs in other media’s basket, letting things like Hulu Plus and HBO Go sell their systems. It’s a smart business venture, as recent reports indicate that the system is used more for online entertainment than online gaming. However, what does it say to the gamers that have delivered the Xbox to its current state?

It’s essentially the same debate that Nintendo has dealt with since the Wii debuted in November of 2006: what means more to the company, new and casual consumers or the hardcore crowd that’s followed them for years? Microsoft is turning their Xbox into a media console, no longer just for the gamer crowd. That may leave a sour taste in the mouths of hardcore gamers. However, there’s one major difference between the Nintendo debate and this one:

Third-party games.

The reason that Nintendo’s focus on the casual market was so apparent was because third-party support for the system was virtually nonexistent. There were some big third-party games, but not nearly to the level that Microsoft sees every year. Some people believe that games like Call of Duty and Madden might as well be Xbox exclusives, as it’s the only system they’ll play the game on. Last year, Microsoft’s E3 keynote was chock-full of third-party heavyweights like Call of Duty: Modern Warfare 3 and Tomb Raider. While in-house software support may be dwindling, Xbox still has plenty of games coming to it, so much so that no one really notices the parent company’s change in perspective.

Microsoft is running with the idea of making Xbox 360 a “media” console instead of just a “gaming” console, much like how Nintendo focused the Wii on the casual, non-gamer market. They’re going to put all of their eggs into the online entertainment basket, making programs like Netflix the top priority. Microsoft’s probably thinking that the gamer-related audience for Xbox has long been established, and now it’s time for the non-gamers to experience their system. It’s savvy, but it could end up backfiring in their faces.

As long as the gaming experience doesn’t suffer and the quality of titles doesn’t go down, gamers will welcome the expanded media offerings on the Xbox 360. However, if Microsoft completely forgets about the gaming crowd and looks only at the media aspect, they will be in trouble. Let’s hope E3 2012 sheds some light on this, as it’s just five weeks away.

There are 31 comments

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  1. Md

    Nice read. This $99 Xbox is news to me. Frankly as a gamer MS has been sorely disappointing me the past couple of years, and Nintendo has been Nintendo. Sony seems to be consistent, and that’s what system I buy games for.

  2. Vamien

    Useless rant. The Xbox 360 is the perfect tool to compete with Apple TV, Roku, and others. Why should Microsoft create a separate product when the 360 already have all the features? To compete effectively these days, Microsoft cannot brand the 360 as just a gaming console, it needs to be more than that.

    And how would quality of titles go down anyway? Microsoft isn’t in the game of making TV content or movies, the company is just offering a service for consumers to access those, and that’s it.

    If the 360 is used more for online entertainment than online gaming, then who is making this happen? The majority of 360 owners are gamers, so who are the ones actually enjoying these services? Gamers dude. What, you don’t think some gamers don’t enjoy other things apart from wasting away online killing each other for points?

    • J.j. Barrington

      The problem isn’t that gamers aren’t enjoying the system. The problem is that the FOCUS is no longer on games. While there will be many people who are happy with having these extra media services along with their system, there’s also the fact that this isn’t the PRIORITY of the gaming crowd who helped build the Xbox brand into what it is.

      The priority for any gamer in relation to any gaming system they own should always be the games. The other stuff is a welcome bonus, but if the game support isn’t there, it doesn’t mean nearly as much to the core gaming crowd.

      Herein lies Microsoft’s problem: instead of balancing the core and casual, they’ve gone solely after the casual in recent years, prompting core gamers to wonder if Microsoft cares. Well, it SHOULD, but many of them seem perfectly content to be given apps for other media, and no longer play games.

      Yes, yes, there are plenty of quality third party offerings, but that has little to do with Microsoft. Maybe it’s just me, but as a gamer, I want my console manufacturer’s primary concern to be GAMES.

      And, you know, given that early adopters of new hardware are overwhelmingly core gamers, alienating them before you release your new system is probably not a good idea.

      Then again, it seems far too many people who own 360s are willing to overlook the fact that Microsoft isn’t giving them games, so maybe the nextbox will do just fine, after all…

    • Axe99

      Aye, but it does mean that, relative to the competition, as a gamer’s device the 360 is falling further behind the PS3.  I’m a PS3 user who is saving up for a 360 as well (and will get one, at some point – it’s a great piece of kit) – and I’ve been disappointed at the slow decline in the relative strength of the 360’s first-party offerings (combined with many of the 360’s exclusives being available on PC, which is where I got my Metro 2033 fix).  I’m still keen to give Halo, Fable and Gears a shake,but while I was a little worried when I first got the PS3 over the 360, over time Sony has been able to deliver a wider and deeper range of quality titles to the platform, whereas Microsoft spent more than the development budget of GT5, Killzone 2 and 3, MAG, SOCOM:Con and SOCOM:SF and God of War 3 combined just on marketing Kinect!

      Note: I think Kinect looks excellent, for what it is. It’s just not what I’m looking for, and while I will deffo get a 360, odds are I’ll never both with Kinect.

  3. Curtis Isabell

    except next gen chances are the nextbox won’t sell unless MS goes back to the gamer roots.
    the only reason people have 360 now is because at first 360 was amazing, its only fault was RROD, it had the best launch games and every multiplat game was much better on 360.

    the PS3 game out a year later and had garbage games plus it was 599 dollars…..
    few years later the PS3 started to matter but by then it was such a fail launch no one cared about it
    last year is when PS3 started to matter…. 360 has been catering to children and not gamers, while the PS3 has been doing well.
    continually gamers are buying PS3s, and this PS3 gamers, income that could have been spent on the next big xbox title.
    kinect games continue to sell poorly and get crap reviews.

    what MS needs to do this E3 is say
    Guys, last year it was about kinect, this year its about the gamers
    here is 4 NEW games for gamers coming 2012 and 2013, also here is our next gen console and here is what it will do.

    the next thing they need to do is compete with PSN+… PSN+ is the best online service right now, its not as fast as xbox, but the sheer number of free games and DLC you get is absurd

    IF sony wasn’t late to the party they would have destroyed MS.

    • Roger

      Yeah, but most of those free games on PSN+ are garbage and you don’t own them, they are just monthly rentals. I agree that MS needs to compete with this, but don’t overhype PSN+. It’s still a garbage network with weekly outtages and random disconnects.

    • Joel fernandez

      Psn is trash…how can you  compare MS’s Online excellence to one that was hacked…give me a break you fanboy. Xbox is smart by doing this because i know they are not going away from the hard core gamers…they are going for the casual gamers who dont play as much and use the media. It took Playstation a few years so they could see a profit…Come again!!

      • venom-ninja-420 /ps3 - 360

        hey to all …. i have a 360 and a ps3 .. and as soon as they come out i will have the ps4 …. but any way . both systems have there ups and downs …. its just what gamers want . i love my ps3  … i must be one of the few that have np issues with the ps3 . for you 360 lovers out there u cant talk trash about ps3  if you have not owned one or even played befor . like i said both have issues . not one of them is above the othere . just play games and leave shit alone . dont be fanboys or xbots  .. and yes psn+ is some bullshit but we do get the betas for multi plat. games befor anyone eles and 360 does have it perks to but like all othere gamers i just wanna kill some fool and talk trash like and good gamer will do . so until both companies do cross plat. gaming we are screwed . we will pay the price to play the newest and better games until the end of time . now stop crying and saying one is better then the other and just play . kill . chill. and do your trash talking to some 12yo until they get thier mommy to fight you . and becareful some moms out there are gamers LOL later

      • rudebox

        Online excellence? I have this weird machine right. They are known as PCs (rumored to stand for Personal Computer) that lets me browse the internet, chat to my friends, play games either single player or with friends online, download media, watch TV etc, the list of functionality could go on forever. But the *really* cool thing about this mysterious device that I own is that it does all this stuff for free! I(Besides the bill for the internet of course). You guys should just keep to your xboxes though because I know you just love to pay a monthly subscription for basic functionality that is and has been free on other platforms for years, almost as much as you love paying twice, sometimes three times the price for the xbox version of a multi platform game.

  4. joe

    Terrible article, plus it is totally slanted toward the PS3. I personally think this would be a great idea if it were a next gen 500 dollar console with all the latest tech. 

  5. Darkie

    Jason what Microsoft is doing is our fault, us Gamers.
    After the Xbox 360 launched,  and the
    early years after, it was shaping up to be the greatest console ever. It even
    launched on time, in all regions, and it had great games from day one. Soon
    after it gave us Gears, Bio Shock, Mass Effect, Crack Down, the list went on.
    Minus the RROD things were nearly perfect, heck they even owned up to the RROD
    and replaced the units free of charge, unlike Sony who still makes gamers pay
    for YLOD.


    After all this what did the hardcore gamers you say MS
    should remember do? We spit in MS’s collective faces. We complained when MS got
    us more exclusives, we whined when MS charged 4 dollars and 16 cents a month for
    a service that was at the time FAR FAR superior to the free alternative, we bashed MS on blogs
    and in forums for every move they made, in month to month sales we rooted for the embodiment of selling
    out to casuals, the Wii. We defended Sonys constant
    screw ups, lack of games at launch, and apparent sacrifice of PS3 gaming for
    the survival of Bluray, while we ripped 360 for being the console that was too


    So after being criticized all through the glory years of
    360s life, for being “too hardcore,” and not having enough kiddy games like
    Ratchet and Clank, now media types want to rip them for saying to hell with you
    wishy washy PS3 nostalgic, so called gamers, and just going after the money?
    Gamers proved when they cried like infants because MS grabbed exclusive games
    for its audience, by any means necessary, that they didn’t care about games,
    they cared about brand nostalgia; Sony brand nostalgia. So since MS cant please
    gamers, doesn’t it make sense to at least try to please their shareholders?

  6. Antifanboy

    The only place Sony is going is bankruptcy, their stock is now worth less than before the PlayStation even existed. Nobody has faith in that company anymore and Kaz won’t be able to turn it around in a timely manner as he wants to keep all the loss making parts. Byebye Sony, you won’t be missed!

    • YO

      Actually there not going bankrupt, they lost money but so did everyone in this time period companies gain and loose money like this. Yes it was a big lost but not enough to count them out. Sony does more then just make ps3, and the only department that took the biggest hit was there TV electronics department but they have Spiderman coming out and many other films and new games, and there new Cristal LED tv’s whick look nice I’m a Samsung tv person but it was still a nice tv with a cool name. We should just hope things get better to have one Gaming Console would suck, just look at the Madden games when you have no competition companies start giving you crap, and you have no choice so you buy it.

      • Guest

        Sony will be out of business within 3 years. You better hope someone buys out the PlayStation branch in a hostile takeover or it’s byebye indeed. Sony are incompetent schmucks without any innovation.

        • DarthDiggler

          Sony will not be out of business in 3 years. 😛

          No innovation?  C’mon that is fanboy rhetoric. I don’t like MS, but I wouldn’t say they have NO INNOVATIONS.  I wouldn’t call them the most creative company out there either.

          Stop being so obviously 1 sided.

          • Roge

            Want to bet? They are right and you are not. Sony is now only worth a little over 16 billion dollars and dropping in value faster than anything. They are indeed ripe for a hostile takeover. Many majority shareholders haven’t been happy with the company direction for a couple of years now, so this is a very realistic situation. It sounds more like you are a brand fanboy that can’t come to terms with his own failure of buying onto a dying brand. Good luck, you’re going to need it as they are going to crash and burn.

          • DarthDiggler

            Dude you are saying Sony will be out of business in a few years I suggest that they won’t and point out how obviously 1-sided the other guy is being and you want to make a wager.

            If SONY does ABSOLUTELY NOTHING they will fail, but economies are dynamic and right now we are in a soft patch thanks in good portion to the lack of leadership in the USA (yes I am pointing at you President Obama) and the mess that Europe has found itself in.

            That being said any company right now who’s revenues depended on disposable income are not doing as good as they were 6 years ago.  This is pretty much across the board, the video game market has shrunk by double digit percentages over last year.  Is that SONY’s fault you ass-hat?

            Microsoft has had some battles in their board room too in this generation.  When the RROD fiasco hit some shareholders were asking “how much money will it take for MS to be successful (in terms of finances) in this market”.

            If the market doesn’t get any better MS could very well be selling off their Xbox division too.  While they have been successful in sales the P&Ls are not as good as they were last generation.

          • DarthDiggler

            Just because I like PlayStation doesn’t mean I have all things Sony.  Jesus is this Dean Martin’s little bother or something? 

  7. Will Game

    if it get the xbox in more hands.  dont you think thats more people that may eventually buy games.   and dont forget sesame street and nat geo is coming as well

  8. Agent75

    The Wii has never had strong first or third party support, even Nintendo officially admitted that last year.  You look at every console that Nintendo has released since the Nintendo 64 (including handhelds), it doesn’t really release a lot of games and I bet it’s the case with the Wii U and 3DS.  As for the Xbox 360, it’s virtually coming to the end of its life, Microsoft probably wants to get it bit more cash out of it (the $15 a month payment plan), maybe the Xbox 720 has been pushed back to a later date, as it’s odd that it’s a 2 year plan.  Consoles have turned into multi media devices which isn’t a problem, even the Wii U will be up there with the Xbox 360 and PS3, the Xbox 720 and PS4 will just continue.

  9. Xald

    thread necromancy here…. sorry

    this…. I dot eve know what to say.
    everyone is getting sOoOoOoOooooooo butthurt over these devices and treats the companies that made them as god and satan and acts like one of them needs to die, does anyone realise, that if there isn’t a ps3 to compete with the 360 your “affordable” console will become the *only* console and then you have a monopoly they can charge whatever they want and then if you dont want to pay the 1000 dollars for the console and the 100 bucks a month for live, then you dont have another system to run to anymore, competition is good, senseless irrational arguing and battling is not, it’s stupid and you all need to plug your arses and stop the butthurt flow

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