Microsoft sets Xbox Live pricing
Pricing holds steady for current subscribers. Monthly fee also introduced.
May 8, 2003: 4:43 PM EDT
By Chris Morris, CNN/Money Staff Writer
NEW YORK (CNN/Money) - Microsoft unveiled its pricing plan for its online gaming service on Thursday, offering a pair of options for Xbox owners.
A one-year renewal to the service this fall will cost $49.99 -- the current price of the Xbox Live starter kit. Less enthusiastic players will have the option of a monthly fee of $5.99, allowing them to play only when games appeal to them (i.e. sports fans who prefer to play only during the season).
Enrolling over 350,000 subscribers in just six months, Xbox Live has been a big success for Microsoft (MSFT: Research, Estimates) -- bigger than even the company was expecting. Widespread praise has helped, but a big draw for consumers has been the free year of service included in the $50 starter kit. Starting in mid-November, that starter kit will climb to nearly $70. It will once again include a headset, one year's service and trial games for new players.
Microsoft is also hoping to capture Xbox Live fence-sitters by offering two-month free trials of the service with select games. Trial players won't be able to talk to their opponents without purchasing the headset (which will be sold separately for $30, but they will hear the usual online chatter and trash talking via their TV's speakers.
Wall St. analysts applauded the pricing structure, saying Microsoft had selected a pricing structure that will please not only hardcore gamers, who would likely have paid an even higher fee, but a mainstream audience -- which has been very reluctant to pay for online gaming to date.
"The price point is certainly an impressive value statement," said John Taylor, managing director and analyst for Arcadia Investment Corp. "I think the going assumption is you have to pay about $10 a month to be involved in a gaming community like this, so to offer a one time fee of $49.99 is going to make it a lot less challenging for kids or teens to get permission to play. I think it's a key price point position."
