Microsoft Explains Why Its Xbox Live Price Hike Is Good, And Good For You

As of Monday, an annual Xbox Live Gold subscription costs $60 a year, a 20 percent jump from Sunday, when it was $50. Microsoft is here to assure you that the inflation is in your best interest, and necessary for the company to keep pace with its rising costs to do something or other.

In a Gamasutra interview, a Microsoft marketing director rationalizes the price enhancement:

Back in 2002, we launched at 49 bucks, which works out to about $4.17 a month, and we’ve held steady for that entire time. Now what we’ve always been very passionate about is that quality needs to be there, but more importantly, the consistency. So if I’m playing Halo: Reach, Gears of War, Call of Duty, the consistency of the service and the experience needs to be there regardless of what that entertainment application is.

So that has been critical. As you can imagine, the costs associated with maintaining a service at that level and making sure all of those features are consistent, we’re hitting that quality bar, we’re adding the customer service infrastructure necessary, we’re accommodating all of the same social features and functionality too, there’s a cost. Infrastructure costs, of course. And we’re continuing to bring more and more content.

Now in 2002, it was strictly multiplayer gaming. Now we get those Call of Duty map packs before anybody else does. We’ve got Gears and Halo, of course, as exclusives. We continue to get exclusives on the service as well. And we’ve gone from 400,000 members in our first year to 25 million.

So during that time, we’ve definitely got to fund it, and we want to add more and more and more. ESPN is a great example. No extra charge for Xbox Live Gold members. But we want to continue to bring that content in. We also want to continue to innovate on all dimensions, whether it’s social, entertainment, or gaming. So there you go.

To be fair, the internet, which also offers ESPN 3 and Netflix streaming access, raised its price 20 percent, from $0 to $0. So this all totally makes sense and is in no way price gouging.

Interview: Microsoft’s Davison On How Kinect Will Help Xbox Live Ramp Up [Gamasutra via Joystiq]

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  1. obits3 says:

    “And we’ve gone from 400,000 members in our first year to 25 million.”

    Doesn’t that mean that you are taking in more money that you could have used to fund these things? Volume is just an excuse for a bad cost model. Also, Walmart seems to find a way to make prices go down when volume goes up. Hmm…

    • phobos512 says:

      And yet I believe it was this very website that had an article on how Walmart is actually subtly raising prices across the board…

      http://consumerist.com/2010/04/study-walmart-price-cuts-are-actually-price-hikes.html

      • obits3 says:

        Step 1: Build a large user base that depends on you by selling at unrealistically low prices.

        Step 2: ?

        Step 3: Profit =)

      • Phil Villakeepinitrreal says:

        Just because Wal-Mart is sneakily driving prices up on the front end doesn’t mean they aren’t continuing to use their usual gestapo tactics to force their suppliers’ prices (and quality) down on the back end.

    • SabreDC says:

      But you’re comparing goods to services.

      Walmart lowers prices by selling lesser quality goods. What good is a $15 microwave if it breaks after 2 weeks of use and you have to buy another one?

      Xbox live went from 400k to 25m users and users expect the same or higher level of quality for that service. If it was a physical item that Microsoft was selling with Xbox live, it can outsource manufacturing and provide lesser quality to lower prices. But a services doesn’t quite work that way, especially not a gaming service where latency is one of the highest concerns.

    • HappyFunTimes says:

      I’m not sure you understand how the Internet works. Having 400,000 members playing a few online games requires less robust servers, bandwidth, infrastructure (data centers, cables, APCs, switches, routers, etc.). When you have 25 million people all online playing intensive games, it requires more of everything not less. Economies of scale does not apply in this situation. Do you think having 25,000,000 people over to your house for tea and biscuits would require more or less food, water, electricity, space, seating, etc. than having over 400,000?

      Taking into account that few games released are single player only with only offline play. Even when they are, patches and DLC are often still released. Also take into account that MSFT does not own the internet any more than you do. MSFT must pay for a connection just like you do. In conjunction, when was the last time your cable, phone, and internet bill went down when not on a promo rate? Everything costs more and now with more subscribers they need more everything to accommodate.

      But Wii online is free! But basic PS3 online is free! They are both vastly inferior for gameplay than the 360 pay service. It’s the same annoying complaining that you see on WoW forums when a patch day takes all day. “I DEMAND R REFUNDZ BLIZZTURD!” When you break down what it costs per day, it’s insignificant. If you can’t afford it, you shouldn’t be playing.

      • tmac40 says:

        I’m not sure you understand how economics work. Wen you offer your service to more people, you make more money. It costs them less per customer, not more. If it cost more per customer, large service companies would not exist because it would be better to have less customers. They are just using corporate double speak to justify a price hike. This price hike will fund higher salaries or profits, but has nothing to do with the level of service.

      • longdvsn says:

        actually, you’ve misinterpreted the situation.

        There are overhead costs and variable costs for every business. Yes, there is a cost increase if their membership goes from 25,000,000 to 25,000,001 – that’s variable cost. Then, there are overhead costs, which, in this case, are more incremental (might have increased every 100,000 players when they have to add a new server, etc.) and some are just fixed. Nobody is going to argue that 25,000,000 members costs the same as 400,000 members.

        The issue is cost per individual member. Obviously there’s the variable cost, and then there’s that member’s share of the overhead. Overall, in a sustainable business, overhead – even with those incremental increases – should be decreasing as volume increases.

        The real increase in pricing is more likely a result of the games now being more intensive (drawing more bandwidth, more computing processes, etc.) than in 2002 – and the price for those services hasn’t decreased at the same rate. That is, variable cost per individual is increasing over time due to more resources being used per member.

      • galm666 says:

        They’re within their right to up the price as long as they throw a lot of added content into the service. The problem is making sure that the content isn’t available elsewhere, which is exactly the problem I have with the service.

        I can do roughly everything that XboxLive Gold touts about without going through them and do it without the premium. Many of the features are available just by having an internet connection, and the online play is really more dependent on the game itself than the matchmaking service you use, which is pretty much what the Wii, PSN and XboxLive are anyways.

        It’s unusual to see people support a service where they’re redundantly paying for something they may not need to, but since this is also a social medium where many users are on their particular service of choice due to their friends, that’s the real incentive. All things constant, going online for play is best via PC or PS3 as neither charge (unless it’s an MMO or similar title). All of the other XboxLive Gold features are just trimming to take people’s minds away from the fact that they’re paying to play with friends and for services available for free that they most likely have by way of the internet connection they already use.

      • SonarTech52 says:

        “Do you think having 25,000,000 people over to your house for tea and biscuits would require more or less food, water, electricity, space, seating, etc. than having over 400,000?”

        Actually, for buying in bulk in larger quantities, your food/water/seating can be cheapter..

        • SonarTech52 says:

          Cheapter? Really?…. edit please… *cheaper

        • fdamstra says:

          There are huge quantities of scale, since you don’t need enough bandwidth/power/cpu for everybody to be on at once, just enough to cover the peak usage.

          It’s easier with smaller numbers.

          Let’s talk about bandwidth. Let’s say we expect each user who’s online to use 100kbps of traffic.

          With 10 users, I could buy 1000kbps of bandwidth so that all 10 of them could play at the same time. In fact, I may have to, since with the small number, the probability of them all playing at once is greater.

          When you have 100 users, however, you can probably guarantee that at any given time, at least 20 of them won’t be using the service. So instead of 10Mbps of bandwidth, I can buy 8Mbps.

          This continues. As the number of subscribers goes up, the average usage trends downward.

          In addition, many things–servers, cooling, humidifiers–are more cost effective at higher scales. Sure, the big water cooled AC unit might cost $10m, but it will handle more workload than 10 $1m units.

      • buckeyegoose says:

        Actualy economies of scale do play into this but not in terms of customer facing benefits. Being bigger means when you need specialized equiptment that would cost $$$ when at 400,000 users would then now cost $$ for 25m as your buying more of them and thus would get a volume discount. Also the data links for the multiple POPs you have to run now can get a better price from a ISP if they know they are having you buy more from them, so instead (purly for comparison) purchasing only one 1Gig link your now going to purchase 10 of them and only use that provider as the source, you can then demand a volume discount on you service, just like the more you bundle with the telephone or cable co the more you save.

    • AustinTXProgrammer says:

      In IT the really big systems have huge price premiums. if you go from 100,000 users to 1m you have to have 10 times the capacity, PLUS a very expensive system to manage the much more complicated beast you have created.

  2. Anonymously says:

    They need more money to hire more “sexual orientation censors” to enforce their brand of Don’t Ask Don’t Tell.

  3. Grogey says:

    We have you by the arm we will no charge what we want. If you want to keep playing hand over the money.

    No thank you, I will watch netflix on my ps3 or my comp.

    • Clyde Barrow says:

      I am always amazed by how many people will complain about such a small price hike, but think nothing of spending gobs of cash at the bar on overpriced beer, junk food, or driving out of their way using excess gas to see a movie. The amount that they’re asking for is a pitance compared to what we spend daily. Make a sandwich for work, use a magicjack for your phone, cancel your cell phone and gym membership, there are many ways to save that $50 bucks.

      For a personal budget, it’s necessary to divide spending into two categories: Mandatory and Discretionary.

      Cannot do anything about Mandatory: mortgage, car, insurance, etc.

      Discretionary spending is the one to focus on and will give you the most bang for your buck in cost avoidances.

      • pawnblue says:

        I am always amazed by people who think that a forum post on Microsoft Live price hikes should include complaints regarding price hikes and waste in other aspects of life.

        I’ll take your beer example. I love good beer, and I’d much rather spend $60 on beer (not in one night) than Live. I’m typically willing to pay up to $5 for a pint of craft brewed happiness ($4 or less is a more typical price though). But if I show up at the bar and prices are suddenly raised from $5 to $6, I’m grumbling.

        I might pay it if I went with a group, but I’ll drink less and I won’t go back. The analogy is clear, it’s price hike, and as a consumer, I don’t care about the price of hops in India. I’ll choose to drink less.

        In the Live case, you have 25 million people who are upset by the price hike. They know it isn’t a cost move, it’s simply an analysis that says 20% won’t quit, so we make more money.

  4. StuffThingsObjects says:

    You know, Phil, you really should try to write something more substantive than just ‘price gouging’. Your ‘snarky’ comments are just pedantic.

    I have no problem paying $5 a month and I’m sure my people won’t either. I set aside plenty of money each month for my entertainment budget and, honestly, I get more out of that $5 a month than I feel I could spend it on something else.

  5. deathbecomesme says:

    They arent really adding content but they are adding to the price. What real updates have they added since the launch of the Xbox 360? What innovations are they speaking of?

    • TuxthePenguin says:

      ESPN 3, Netflix… although the later is free on PS3 and Wii…

      • deathbecomesme says:

        They didnt develop or come up with those. Its not coming out of their pocket to pay someone to come up with them. That cost lays with ESPN and Netflix.

        • phobos512 says:

          You’re right, when they decided to add Netflix it just magically appeared in their codebase and commercials.

          They had to pay someone to do the programming, someone to do the marketing, pay for licensing fees…These things DO cost money.

          However, I’m not buying that the only solution was to raise prices this significantly. Though, if you’re actually paying that price hike, well, you’re not very resourceful. I’ve never paid “full” price for XBox Live, and probably wouldn’t given how often I don’t use it.

          • IThinkThereforeIAm says:

            While I don’t have known facts behind me, the way I see Netflix’s spread all over the consoles (on other devices) I am pretty sure Netflix paid for developing the XBox module.
            And yes, MS probably had some cost associated with distributing it (can you say: point and click?) I seriously doubt that it would’ve broken their bank account….

          • tmac40 says:

            If Netflix cost them so much money, then why is it free on my Wii, blu-ray player, and PC plus the PS3. Adding Netflix is no reason to increase fees.

        • RogerX says:

          They sold millions of xboxes at a loss to get the system going. How many people whould have had their torches and pitchforks out if they sold the box for $700 and the Live for $180 a year so they could make money out of the gate? They make margins on accessories and game licenses. They update the dashboard regularly. Service in general is stable. They manage the multiplayer server situation, forums, and provide security and policy enforcement (though the quality of the job they do is hugely subjective). This is worth $5 a month to most consumers. You are welcome to not pay the $5 if you do not find the service worth the asking price. Feel free to go over to Playstation Home or check out PC or Wii online gaming.

  6. Loias supports harsher punishments against corporations says:

    A company can never blame icnreased volume as a reason to increase prices….because volume increases revenue which is used to support the increased volume.

    I swear, businesses think we’re just stupid. Sorry, we can follow some basic logic and know that it’s just a grab at money,

    • nbs2 says:

      I sort of agree. Generally, increased volume isn’t a reason to increase price. But, if a division is required to maintain certain levels of profitability, then expanding infrastructure (which will have no direct or foreseeable impact on user rates) may merit a price increase. Once those fixed costs are recovered, the division can then lower prices to previous levels or enjoy greater profitability. The parent company will probably push for the latter.

      Special assessments make sense when unanticipated and urgent capital projects are being undertaken. I don’t think improving capacity is unanticipated, but if services are so expanded (both user base and features) from initial forecast it may be urgent.

    • aloria says:

      Increase in users subscriptions and the cost to expand infrastructure to account for that increase aren’t always directly correlated. It’s one thing to keep a bunch of existing servers up and running, entirely another to have to build an entire new data center because your user base shot up exponentially.

    • grapedog says:

      Hey, you don’t know… Maybe XBox only suspected of selling 500,000 consoles in the 10 year lifespan of their newest machine! They probably only built enough infrastructure to handle 1 million people, because they were planning ahead.

      What’s $4.17 a month x 25 million? It’s a fucking lot, that’s what it is… they are raising the costs of XBox live because they want to, and they can, and people are not going to do anything about it. Kind of like our congress… people are just going to sit back and take it up the ass from Microsoft.

  7. JoeTheDragon says:

    M$ has to make up the costs from the red ring of death mess somehow.

  8. pot_roast says:

    It *isn’t* price gouging.

    From 2002-2010, it’s been $50 a YEAR. Now it’s $60 a year. $5/month. Really, that isn’t bad at all. I’m surprised that it hasn’t gotten more expensive.

    • Supes says:

      Yeah but the rationale is lame.

      Plus honestly it’s just been getting cheaper to deliver the content over this 8 years period, so their profit margin has already been increasing.

    • sqlrob says:

      And how much is the competing service on the PS3?

      Yeah, it is price gouging

      • coren says:

        What competing service? PS3’s online services would actually have to be competing, and right now they’re so bad they’re not even close.

    • hansolo247 says:

      they actually made it $10 cheaper if you renew like, now.

  9. TuxthePenguin says:

    To be fair, its a 20% jump from prices 8 years ago. If you calculate the rate on monthly compound, it works out to 2.2% annually. Not that bad…

  10. The_Fuzz_53 says:

    Speaking of raising internet prices, Verizon raised my Fios bill by $10/month with absolutely 0 notice. Has this happened to anyone else?

    • Sepp_TB says:

      Yes. They sent out notice to me though, a couple months ago. Of course they send their subscribers so many upsell offers, and the notice came in an almost identical envelope to their special offers, did you possibly throw it out?

      • The_Fuzz_53 says:

        I probably did. They send me junk about 4 times a week that I don’t even bother to open it anymore.

    • apd09 says:

      I actually just got my bill decreased by 26.00 a month down to 169.00 from the previous 195.00 and I upgraded service from Extreme HD to Ultimate HD. Not too mention with the new Tiered Data Plans from Verizon I dropped my 2 Blackberry Data Plans down to 15.00 a month for 150mb so I have an additional 30 a month in savings from them. All totaled out in the span of 3 days I was able to save 56.00 on my Verizon services.

      I sent the Tiered Data Plan info to Consumerist, twice, but have yet to see anything posted here about it when the Unlimited Data plan is something that many people had been complaining about and the Tiered had been rumored for some time. It seems as if a company has finally listened to its clients and is something that is very newsworthy, but alas it just seems not meant to be for people to learn about it here.

      • The_Fuzz_53 says:

        I have only Fios for internet bundled with my cell phone plan, which yields an $8/month savings. I went from paying $45/month for 20/5 service and suddenly this month it is now $55/month. I’ll have to look at my cell phone usage and see if 150mb will be enough for me. Now that I have a Bold with Wi-Fi, it probably should be good enough.

        • apd09 says:

          they actually upgraded my internet speed as well to 35/35. Check your bill and take a look at your data usage over the least few months, in you stream a bunch of things on your phone like video or music you might not want to go to the 15 dollar data plan but if you just use the phone for things like web browsing, facebook, etc… 150 should be more than enough.

        • jake.valentine says:

          $55 for 20/5 internet service?!? The glass is half full my friend. I have Time Warner and pay about the same for much less speed and a completely unreliable connection (frequently goes out for about an hour at a time). I wish Fios was available out here…………

  11. grucifer says:

    I’m fine paying for a Gold membership of Live, but to say that they get CoD map packs first and shit is ridiculous because Acitivision is still charging $15 for the damn things. If they want to up it to $60 with the excuse that gamers get map packs first for CoD, I don’t want to pay $15 for the map packs.

    • StuffThingsObjects says:

      Not playing such a horrid game also solves your problems.

      • grucifer says:

        True and I don’t, but still if you’re going to say the price of a Gold membership is going up by X amount because of Y reason. I don’t want to pay for reason Y in a separate charge. Was just using CoD as an example.

    • dolemite says:

      When they announced the map packs at $15 and I saw they were just 2 new maps and some old maps rehashed, I immediately sold my CoD on Ebay. I’m not going to support that crap.

  12. allstar3970 says:

    “To be fair, the internet, which also offers ESPN 3 and Netflix streaming access, raised its price 20 percent, from $0 to $0.”

    You don’t pay for your internet?

    • jeff_the_snake says:

      0$ above and beyond the cost of service and a netflix subscription which you still need to use it over xbox live

      • coopjust says:

        Not true. You pay for ESPN3 (exception: College & Mil emails get it for free).

        If you’re not logged in with a .EDU or .MIL email, ESPN does a WHOIS lookup on your IP. If you’re with an ISP that pays ESPN every month for ESPN3, you can watch it for “free”. If your ISP doesn’t pay (e.x. Cablevision), you can’t watch.

    • spadefoot says:

      You mean the Internet I already have to pay for in order to be able to use the Gold sub? Or perhaps you mean the Netflix membership that I have to pay for in order to be able to watch it on the 360 (plus my gold sub fee). Basically, they charge us for access to things we have already paid for, and then DON’T give us access to the Internet as a whole.

    • tmac40 says:

      Your Xbox Live membership comes with free internet access?

  13. larsdad says:

    I’m not buying their justification for the price hike (higher volume should equal lower prices), but there are still deals to be had for a cheaper membership–which is the route I think everyone should take…got my current year for 30 bucks!!!

  14. RogerX says:

    I dunno. One price increase in 8 years, for a service that offers much much more than it did then to many more people? For xbox junkies, $5 a month is still a pretty sweet deal for the Gold benefits.

    Would the reaction have been less visceral if they had raised it to $55 in 2005 and $60 in 2010?

    • JlGomez says:

      Are you aware the PS3.. does not charge for online gaming at all.. only for a different membership.. but the multiplayer part is the same…

      • RogerX says:

        The money to host & manage PS3 online multiplayer is coming form somewhere though; typically the game publishers, right?

  15. JlGomez says:

    There full of $h!t…. I dont watch ESPN3.. I dont socialize in Facebook.. I dont stream Netflix… Do I get a discount then… Why do I have to pay $20 more a month.. explain that..Your just skruing people out of there money…

    • nbs2 says:

      You’re paying $20 more a month because of this? I want to know what plan you were on where they paid you $15/month to have a Gold account. Of course, if you had been prudent with that money, you could have paid full price for a year at the new rates by simply saving 4 months of payments. If you signed up eight years ago, that would have covered your subscription fees for nearly 25 years!

      Or is this just Phil commenting on his own story?

      • JlGomez says:

        If you werent such a prud yourself you would notice.. I made a mistake in saying a month.. and not a year…

        • ZekeDMS says:

          Prud? Skruing? Ellipses used as periods? Bad math?

          I’m smelling troll. This can’t be a real post. The difference is $10 a year, not $20, and those…those aren’t even words.

      • The hand that feeds, now with more bacon says:

        Maybe he has 20 subscriptions?

    • dolemite says:

      I think you misunderstand…the price is going up like $10 a year.

      • JlGomez says:

        correct my mistake .. but I was just trying to make a point… there saying the reasoning behind there raise where non of these I use..

    • dolemite says:

      Yeah, I understand…you bought the xbox to play games, not play on facebook or twitter with friends. The hardcore gamers get screwed in the deal.

    • galm666 says:

      They really should make it ala carte. Or at least allow online play for free and then charge extra for everything else. Sony’s doing it with that Playstation Plus service. I’m thinking about jumping in, but I’m not enough of a fiend to need it.

  16. aloria says:

    Welcome to reality, where the cost of running and maintaining a network infrastructure rise with the amount of users (i.e. strain on the system.) Sorry, but the price going up for the first time in 8 years, and only by $10, isn’t exactly blowing my mind,.

    It’s pretty hard coming up with *any* rationale that will placate people who are whining about a less-than-$1-a-month price hike, but I think the one MS provided isn’t that terrible.

  17. codiac says:

    If you’ve been paying $50, why are you on consumerist? These year upgrades are on sale all the time on the internet. So if it’s an increase from $30 to $35 or $40, oh well.

    • aloria says:

      Excellent point. I don’t think I have ever spent more than $30 for my yearly subscription.

    • working class Zer0 says:

      I just renewed for $39.95 through the X-Box. You can always find a better deal if you take the time to search it out.

  18. wiggie2gone says:

    I would like to see the demand curve diagram for this. I want to see what profit margin and if its holding with this price or increasing.

  19. jeff_the_snake says:

    Not too crazy a hike but it does highlight the fact that you can’t take your console and use it on a competing service.

  20. Stephmo says:

    I just want to make sure that this “story” is a promise that any company that ever raises the price of goods ever will be featured on the site regardless of said price hike rationale. After all we clearly deseve to never ever have the cost of anything go up ever.

    This is post-bait. For those that really think this is a massive hike after 9 years, welcome to the world. I hope that turnip truck ride wasn’t too rough. You might not want to look at what happened to the chicken wings…way more than 20%…

  21. Stephmo says:

    I just want to make sure that this “story” is a promise that any company that ever raises the price of goods ever will be featured on the site regardless of said price hike rationale. After all we clearly deseve to never ever have the cost of anything go up ever.

    This is post-bait. For those that really think this is a massive hike after 9 years, welcome to the world. I hope that turnip truck ride wasn’t too rough. You might not want to look at what happened to the chicken wings…way more than 20%…

  22. Larraque eats babies says:

    I cancelled my xbox gold membership when they cancelled the digital version of 1 vs 100 (which was fantastic, by the way). I don’t play a lot of online multiplayer but when I do, it’s usually strategy oriented games. I’m not sure it’s worth it for me for the right to play Catan online. That was at $50. With the price increase I have even less reason.

    On rare occasion I’ll play an FPS but I’m really below the curve on those (yay! I got last place again). I have played some Rock Band 2 and 3 online but for the most part the online experience there is less good than offline — I have ~ 700 songs and I don’t want to play “avenged sevenfold – almost easy” ever again, thanks.

    I do occasionally use the xbox for Netflix, but I can use my Wii for that now. ESPN3 doesn’t matter one bit to me either.

    The only other thing I think I’ll miss is the Gold Exclusive deals of the week. Those are frequently good — I just bought Risk Factions for 50% off, for example.

    Overall though, when january rolls around I’m pretty sure I’ll be going back to silver.

    • Larraque eats babies says:

      OH! And not to mention having to pay for game expansions that the PC gets for free. I’m looking at you, Left for Dead expansion packs.

  23. TVGenius says:

    I’m perfectly happy with what I get in my PSN membership for only $0 a year. I don’t need ESPN. I already get Netflix on there. And I’ve had fewer issues with online play on the PSN than stories I’ve heard online about ongoing XBL outages…

    • DanRydell says:

      They’ve only had one major outage that I recall, right after Christmas a few years ago. They occasionally have maintenance outages in the middle of the night, but beyond that it’s always there when I want it to be.

      I wouldn’t be surprised if Sony re-evaluates PSN next generation. Anyone who owns both consoles will tell you that Xbox Live offers a better experience. After their experience with the PS3, I think Sony will be more focused on making a profit with the PS4.

      • NaptownMVP says:

        What makes XBL a better service, honestly? The only thing that matters is up time. If they are similar, then XBL users are getting the shaft. I have never used PSN, so I don’t know if their uptime is not as good, or what, but having to pay 60 bucks for a service that others get absolutely free really makes me regret my Xbox purchase, and will be something I keep in mind when it is time to buy another console.

    • dush says:

      this is probably the real reason MS doesn’t make a web browser for the XBOX like the pS3 and Wii have.
      Then MS can charge for “apps” that you can normally do for free over the Internet.

  24. intense_jack says:

    I gotta say the new XBOX Live interface is awful. It honestly looks like a downgrade from what it previously was. It’s all boxy now and has plain white backgrounds by default. It really is unimpressive, if not a total disappointment. I’m not sure why I would/should pay more money for it. And ESPN? No offense, if I want to watch sports I’ll just go watch it on my TV or at a sports bar with my buddies.

    • Larraque eats babies says:

      Yeah. I hate the new interface. I guess that’s for Kinect users or something.

    • Andy S. says:

      It reminds me a lot of what they’re doing with the Windows Phone 7 UI. This is not a good thing, in my opinion.

      Also, the new, more proportionally-accurate avatars creep me out with their tiny heads.

    • Framling says:

      It’s awful! It honestly hurts my eyes to look at it. The flash it does every time you move up or down on the main menu makes my wife motion sick.

      Why the hell aren’t there multiple themes for me to choose from, like even my shitty cell phone has?

  25. dolemite says:

    Yeah….you get the map packs, and they cost $15 for 2 new maps and 3 old rehashed maps.

    I’ll admit I am happy they’ve added things like Netflix, Last FM, etc. (I REALLY wish they’d add a web browser).

  26. DanRydell says:

    Re: ESPN3 and Netflix – presumably Microsoft paid for the (timed) exclusivity, which is the added cost he was referring to there. The thing is, exclusivity doesn’t benefit Xbox Live users. It benefits Microsoft. He might as well say they raised the price because of marketing expenses, which is not what the user wants to hear.

    If he had just said they raised it because of inflation and other features they’ve added, that’d be fine. It’s a great service, and it’s worth paying for if you play online multiplayer games.

  27. robocop is bleeding says:

    Could be worse. They could start charging for access to game fixing patches. Fallout New Vegas would get MS a kajillion dollars all on its own!

    • WickedCrispy says:

      Activision has stated numerous times in the last few years they are going to make this a reality.

  28. mrstu says:

    “We’ve got Gears and Halo, of course, as exclusives. We continue to get exclusives on the service as well. “

    Exclusive titles are a benefit to YOU, not to the consumer.

  29. no says:

    And those of us who could not care less about ESPN? And how about those who can’t use it anyway even if they want to (Time Warner customers, from just a few days ago…) I only begrudgingly renewed my XBL Gold membership for a second year (and what a hassle it was!). I doubt I will for a third.

  30. Shouty D says:

    Not only is this a minimal rise in cost, but anyone that is on XBL should have been paying attention to the fact that this has been coming for months. They’ve been offering discounts all summer, and just last week, if you renewed for two years, you locked in on a discount from the (then) current rate. I got two years for $85. And that’s direct from XBL. Like many have mentioned, there were plenty of ways to renew at prices as low as $30/yr. So suck it, everyone else that’s late to the party.

    • VashTS says:

      I guess Souty D is happy. I mean I am glad he had the foresight to pay M$ ahead of time. I have never heard of someone bragging about paying M$ for services that other consumers get for free through PS3 and their PC’s.

      Wish I was a skilled Consumerist like Shouty D.

  31. eddieck says:

    All of this garbage they offer is free on the PC. Oh, and PC multiplayer is actually hosted on actual dedicated servers, unlike the P2P garbage Microshaft sells.

  32. Scuba Steve says:

    Sure are a lot of fan boys on this article. Both for and against Microsoft. Me? I am under the impression that a Multi-billion dollar corporation doesn’t need little ol’ me to make rationalizations and excuses for them, and to help them win arguments on the internet. Which means I’m obviously Anti-Microsoft. /sarcasm

    What $5 dollars a month means to me:
    A 1/3 or 1/2 of a game.
    A Fast food meal.
    Valve TF2 keys (Damn them!)

    Obviously, not very much. However, lets look at how much any of the things Microsoft Offers means to me:

    1. Multiplayer gaming: Might be worth $5 a month to me. Alternatives: PS3, PC, Wii: Free
    Winner: Alternatives (And Consumers)
    2. Exclusives: Not worth anything to me. I don’t care to pay Microsoft to deprive everyone else of games. Alternatives: None. Obviously. Winner: Microsoft (Not consumers)
    3. ESPN3, a bottom tier version of a free service? Worth: Nothing.
    4. Netflix: Worth: Nothing. Alternatives: Free.
    5. Facebook: Worth: Nothing Alternatives: Free

    So it seems Microsoft is blowing a lot of smoke up our collective asses trying to justify its price increase with “Value” that actually isn’t very valuable at all.

    The only real reason it needs: Because it can. Microsoft can do this because the people who pay for Live have little to no choice. They don’t own Gamer PCs. They don’t have their favorite games on other consoles. When they want to play MW2 or RDR, they only have the one console and will hesitantly pay more, because they have no alternatives.

    Of course they don’t have my pity. It’s a hobby, after all. A fun experience. The only people who have my pity are those who try to defend this as anything other than “Well, its their service, they can charge whatever people will pay, And apparently thats a lot.” because any other defense is complete bullshit.

  33. JlGomez says:

    Its on special right now at Buy.com for $38.99 free shipping..

  34. Plasmafox says:

    Yep, all those “exclusives”. Meaning microsoft paid a company millions(or just bought the company) so that only people on xbox can play it. Maybe if they didn’t do this “service” they wouldn’t have to charge as much. And ESPN? What if I don’t WANT that service? Why should I be forced to pay for everyone else to get it? And 25 million? Are they just counting every Xbox user, including “silver” users, while implying that number includes only paid users?

    25 million times $60… 1.5 billion dollars. Yep, they sure needed that price increase to maintain the same level of service.

  35. Andy S. says:

    “We’ve got these exclusives, and we’ve shelled out big bucks to the content providers to make that content exclusive to Xbox, so we need to charge more to recoup those costs. See, we’re doing it for our customers!”

  36. VashTS says:

    Why do people try to justify when companies raise prices. It usually to price gouge the paying public. It is not in the best interest of the people. They have you hook and can do whatever they want because you are now a addict.

    The soft drink industry did this when they switched to HFCS.
    WHy do you think companies are using the shrink-ray?

    Why defend a company that is price gouging. If you are 12 understandable, you do not know any better. I used to defend Nintendo because I believed all videogame companies are good. Nintendo seal of Quality. I matured and understand 99% of companies when it comes to screwing the consumers, justify it wth a salesmen pitch.

  37. bschaa00 says:

    that equates to 1.25 BILLION dollars per year.

  38. Goatweed says:

    Not defending M$, but if this hike was really such an outrage then the members should speak with their wallets and not renew their Gold membership. I personally have no problem with it as I’ve never had to deal with a substandard online connection – either gaming or streaming movies – and if it should ever become a burden on me I’ll just cancel.

    M$ would respond in kind if they lost 20% of their Gold members but since you don;t see people dropping in droves, the $60 will remain.

  39. SPOON - now with Forkin attitude says:

    so for a monthly income of 4.17* 25 million or 104,250,000, Microsoft can’t get a good deal on rackspace somewhere? OMGWTFBBQ?

  40. RvLeshrac says:

    Just don’t whine when it goes up another $10. And then another $10. And another $10.

  41. RvLeshrac says:

    No one has pointed out that you don’t get ESPN3 with a Gold membership. You get ESPN3 from your Cable provider. You just get a browser on your 360.

    And if you’re on Time-Warner, you can’t even get that much.

  42. milrtime83 says:

    “We’ve got Gears and Halo, of course, as exclusives.”

    I like how they throw that in there. It’s basically saying you are paying more for the ‘privilege’ of only being able to play these games with this service.

  43. Mphone says:

    That’s why I only buy the cards when I can get a good deal on them. I use PSN more anyway since it is free. I have both systems and play a lot of online games. They are basically the same now. Sure, back when PSN first came out it was weak. That is no longer the case.

  44. VectorVictor says:

    Phil, can you try and keep the PS3/Wii fanboi comments out of your Consumerist posts?

    Makes it kind of hard to recommend the site to friends when one of the contributes dons a troll costume when it comes to XBox 360/Microsoft articles.

    And as an owner of both a PS3 and 360, there’s a reason I don’t have a problem paying $40 to 60/year (some of us are thrifty shoppers…) for XBL service–it is a superior service compared to what the PS3 and Wii offer.

  45. bigdirty says:

    I really wondering how many of the complaining people actually subscribe to the service. It just sounds like people complaining for the sake of complaining that they can’t get it for free. With a small handfull of exceptions, most subscribers are happy with the services provided, and the price change doesn’t really have that big of an effect on them.

    I include myself in the group of, I’m happy and an extra $10/year is no big deal. It’s inflation, my cable bill, the price of a movie ticket, blu-rays on Netflix, and game prices have all gone up, so why should XBL stay at the same pricepoint from nearly a decade ago?

  46. Clyde Barrow says:

    At $60, it’s still a great price to have fun and this equates to about 16.4 cents a day. And besides, anyone can blow $60 in an hour at a nightclub or dinner. And staying in my home on a Friday night is much safer than driving around after the bar and I don’t have to worry about getting stopped by the cops.

    A pizza, six-pack of brew, and my xbox360 is all I need.

  47. Kid U says:

    This is just a piss poor rationalization all around. Specifically:

    “Now we get those Call of Duty map packs before anybody else does.”

    So I am paying $10 more because you are giving me the opportunity to buy CoD map packs faster? What if I don’t even play CoD?

    “We’ve got Gears and Halo, of course, as exclusives.”

    So my $10 is going towards making sure I can’t play certain games on my other systems? Awesome, that sounds great, glad I could pitch in with limiting my options as a consumer.

    “ESPN is a great example. No extra charge for Xbox Live Gold members. But we want to continue to bring that content in.”

    The ESPN3 deal as a rationale for the price bump is the worst. ESPN3 access is dependent on your ISP; if your ISP is partnered w/ ESPN, you already have access with or without XBL. The only thing XBL does is let you get ESPN3 on your TV screen easier. Same w/ Netflix.

  48. doomsdayZen says:

    “To be fair, the internet, which also offers ESPN 3 and Netflix streaming access, raised its price 20 percent, from $0 to $0.” — classic.

  49. dush says:

    It just stunk that for two weeks before the price hike they were advertising a lock in rate of $39.99 for 12 months to get you to resubscribe. However this was always broken and I went round and round with numerous MS agents on the phone and on email trying to purchase 12 months of Live Gold and was never able to.

  50. common_sense84 says:

    What a farce. All of the games they listed are host based games. Meaning a user is the host. Thus xbox live doesn’t handle the bandwidth at all.

    Charging makes no sense unless they are going to run dedicated servers.

  51. junip says:

    Haha, I love it when services say “We’ve added new features and raised our prices, but those new features are FREE at no extra charge to all the customers who now have to pay a higher price. Free I tell you!”

  52. Geekybiker says:

    And still almost no dedicated servers for games. Peer to peer hosting sucks.

  53. WickedCrispy says:

    This makes you wonder at all the complaints of Modern Warfare 2 concerning cheating and the like, as well as Bobby Kotick’s comments on charging more for nothing. I already pay for internet service. If a console game cannot enforce it’s own content, EULA, and quality without getting more of my money, I’ll stick to my PC, thanks.

  54. Marumm says:

    …while at the same time disallowing companies from releasing free significant DLC packs (the recent Left 4 Dead 2 situation) and allowing companies like EA to charge an additional fee for an ‘Online Pass’ in addition to the Xbox Gold membership.

    I appreciate the additional content, but Netflix isn’t free, so if you don’t have a subscription, there’s not a lot of value added.

  55. coren says:

    If you’re paying 60/year or 50/year you’re not doing it right anyway. Buy the live cards for 30-40. Much more cost effective and you don’t get “price gouged”

  56. nybiker says:

    Infrastructure costs? I think that Microsoft might want to visit this site: http://www.microsoft.com/hyper-v-server/en/us/default.aspx to see about some server consolidation options. Or maybe http://www.vmware.com/

    I’d like to see a comparison between the two products to see which might be a better solution for their gaming datacenter.

  57. sopmodm14 says:

    i like how corporate places everywhere make “improvements” to customers/clients, but yet never consult with them…after all, how do they know what they want if they don’t seek them out ?

  58. sopmodm14 says:

    i’m glad i cashed in my xbox for ps3

    if ps3 charged, i’d cash it in for a wii

  59. Levk says:

    yea, i will stick to my PC games they seem to know how to make it better

  60. zegron says:

    Its $10 more a YEAR, or $0.83 cents a month, if you are upset about this you need to get over yourself.

  61. brianisthegreatest says:

    uhm…

    The internet isn’t free–neither is netflix. What are you even saying? Where do you get online and have netflix streaming for $0? Must be Canadian prices. You’re a moron.

  62. shepd says:

    This is what it costs in Canada. Considering the US dollar is basically on par, it makes sense.