How MS Can Actually Justify $100 Xbox Live Service

on October 28, 2009 12:55 PM

Ok, so I know this may be a bit of a reach. And I’m sure there will be plenty of people who think this may sound crazy but here goes anyway. I recently read an article by Shawn Evans from Gamerlimit, and in his well written editorial, Shawn poses the argument of how “$100 Xbox Live would end the console war.” Now before you get all “screw you MS, we’re writing a petition” on me, this isn’t something that has been officially announced by anyone even remotely related to Microsoft or it affiliates. No this “prediction” was made by none other than the “swami” of videos games himself. You know, the non-gaming-yet-somehow-knows-everything, Wedbush Morgan Securities analyst who everyone loves to hate: Mr. Michael Pachter.

On this past week’s GametrailersTV: Bonus Round, Pachter spoke about the Xbox Live service receiving an increase to $100 per year. At first I was blown away by the statement (a common occurrence for me whenever Pachter opens his mouth) but then I when I sat back and really thought about the situation it may not be as bad as one would originally think, under certain conditions of course. If done correctly I wouldn’t mind paying $100 per year, but please allow me to elaborate.

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At this year’s E3, Microsoft announced a certain bevy of features that would be hitting the green machine in the fall. As of this week, people that have signed up for an early preview of the update are now getting their paws on it and putting it through its paces. From most of the initial impressions that I’ve read online and heard from friends participating in the pilot program, feedback has been for the most part very positive.

Now, do I really think that adding social networking (Facebook, Myspace, and Twitter) and online radio (Last.fm), all of which are features available for free on the PC, justify an eventual 100% price increase, absolutely not. It’s the other big feature, namely the Zune Marketplace (with 1080p video instant-on) that’s included with this update that may very well substantiate paying double for what subscribers are currently paying for their Xbox Live Gold Membership.

Microsoft’s Xbox 360 has had Netflix integrated into the NXE since the fall dashboard update of 2008. Now a little over a year later, and the Netflix home console “experiment” is looking more and more like a success everyday, the company is now looking for any means of branching out in order to reach as many living rooms as possible. The service at this point has made a home for itself on DVD/Blu-Ray players and even set-top boxes, and is now looking at Microsoft’s direct competitors in the console war as well.

This past Sunday it was announced that Netflix’s “play now” streaming service would be coming to Sony’s Playstation 3 console. And as of today it seems the Nintendo Wii will also be getting into the action next year as well. There are certain circumstances that apply:

“For the time being, users will have to insert a disc into their PS3’s to have the streaming features, Pachter believes the disc is a necessity to avoid breaking the deal with Microsoft.”

Through that we know, that Netflix was or rather is exclusive to the 360, they’ve just found a loophole to get around it. Those sly devils that they are!

What do I think this Netflix business has to do with the Zune Marketplace? Everything. If Microsoft’s latest video service is truly “Instant On” as they say, then why would the 360 even need Netflix in the first place? Wouldn’t it be great/easier to those that shell out $9 bucks a month for Netflix streaming (which comes out to $108 per year anyway), to simply play $100 per year for both a superior online gaming service (sorry PSN fans) and 1080p all-you-can-watch video playing service? It sure as hell would be!

They can even turn Xbox Live into a 3-tier system. Silver membership: for cheap assholes, Gold membership: for online gaming, and Platinum: for online gaming as well as all the movies you can watch!

I know that some people will say, “Come on Joel, keep dreaming it will never happen.” Well if not, then give me a better reason as to why they would charge double for a service that is all Peer 2 Peer based anyway and isn’t dependent of dedicated servers for gaming. The only logical explanation would be that if (and that’s a big IF) Microsoft decides on raising the price then there have to be features added to rationalize it, and the only thing I can think of in this current update is the Zune Marketplace.

From a business standpoint, it makes perfect sense. Microsoft naming it the Zune Marketplace is definitely done for a reason as I’m sure whatever you rent on there you will be readily available to transfer over to Microsoft’s PMP of the same name. Also, when Netflix becomes readily available on 2 other gaming consoles, one of which has a built in Blu-Ray player, it doesn’t seem as big of a selling point as it was, let’s say a year ago on the 360. This provides the perfect opportunity to break away from Netflix, and at the same time not feel like anything was lost in the process. Sure, Sony can still keep up their blockade of any Columbia Pictures (owned by Sony) and Sony Pictures movies hitting the 360 on the Zune marketplace. And to that all I have to say is I look at iTunes, Apple went a good long while missing 1/3 of all the world’s music and I think they’re doing all right. If i really want to watch Spiderman 3 that bad I can always buy it for like $3 anyway.

Well there you have it. If Michael Pachter and his super-human predicting powers have served him well, and this $100 Xbox Live service becomes a reality, then here’s to hoping that it may very well be worth it! And seriously, Netflix’s “Play Now” is overrated and congested with below average b-movies and old TV shows anyway. How many times can you watch Season 1 of the Golden Girls anyway? (don’t answer that)

 /  Co-Founder
Joel Taveras is one of the founding members of DualShockers. He hails from New York City where he lives with his wife and two sons. During his tenure with the site, he's held every position from news writer to community manager to editor in chief. Currently he manages the behind the scenes and day-to-day operations at the publication.
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