Pachter: Xbox Live Gold Will Get More Expensive

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Pachter: Xbox Live Gold Will Get More Expensive

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Outspoken industry analyst Michael Pachter thinks that Microsoft will raise the price of an Xbox Live Gold subscription over the next few years.

Speaking in an interview with GameTrailers TV, the Wedbush Morgan Securities analyst said that a declining profit margin for Microsoft meant that gamers could end up seeing the cost of an Xbox Live Gold subscription rise to as much as $100 (£61) per year - double its current price.

Microsoft was devoting more and more of its resources to Xbox Live because its comparable service for PCs - Games for Windows Live - simply wasn't profitable, said Pachter. "You can't hook a guy into Xbox Live Gold if he's playing on a PC," said the ubiquitous analyst, ".. that's the other problem - you really want to hook every gamer who has a 360, you want them to buy all their games on 360, play everything multiplayer, pay you 50 bucks a year so that, in a couple years, it's 100 bucks a year."

"And that's going up, we all know that ... it's a profit deal," he concluded.

Now, to his credit, Pachter has made some accurate guesses in the past, and it is true that Microsoft does love its money (as does every other company in the world). On the other hand, Pachter has also missed the mark with his predictions, and I can't help but think that this is one of those times. While still not quite as robust a service, Sony's competing PSN is slowly encroaching on Xbox Live, and its one advantage is a significant one - it's free. Nintendo's marketplace is free to use as well, which makes Microsoft the only one of the Big Three to charge for its online service.

Thus far, Microsoft has stuck to its guns with Xbox Live, pointing out the better value of XBL compared to its competitors, and has been rewarded with an estimated ~20 million subscribers. However, as that gap narrows, raising the price - let alone doubling it - would seem incredibly foolish, and would be as likely to result in a consumer backlash as it would be to increase profits. So this is an extremely hard pill to swallow, because Microsoft isn't made of idiots - the bad press from a decision like this would be overwhelming.

What I can see happening is for Microsoft to start offering an "Xbox Live Platinum" service which would fetch a higher price, but would have more cross-platform functionality along the lines of the Twitter, Facebook, and Last.FM arrangements that have already been announced. The trick then would be to balance the new Platinum features while still updating Gold in order to keep XBL a step or three ahead of PSN.

But just raising the price on Xbox Live Gold - especially in this economic climate - would be virtual PR suicide for the House That Gates Built. Sorry, Mike, but I don't see this one happening.

(CVG via Edge)

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I'm not necessarily an expert as far as economics goes, but I highly doubt Microsoft would be so bold as to increase the price for Live Gold, especially by 100%.

But your theory of a Live Platinum service does make plenty of sense, but even then I doubt Microsoft would charge any more than, say, 75$ a year, and that's pushing it.

Has anything this Pachter predicted ever come true? I understand you might be mis-quoting him, but still I can't ever see this happening...

I think Microsoft would make a fuckton more money if they instead dropped XBLG subscription to a tenner, or made it free a lŠ PSN.

As XBL already costs the same as a new game, it puts off many players. £100 for 12 months of play would probably kill off any gamers intent on subscribing.

Bad move, drop the price.

I certainly hope they don't raise the price.
If people started freaking out about a rumor, I can see people running for the GAME stores and buying all the Gold cards they can... and then the shops could just raise the price, blaming it on 'increased demand'

I'm with you John. I know for one that I would cease subscribing if they doubled the price.

You know, as far as I can really tell from Patcher's history (although admittedly I don't follow everything he does), he seems to get things right about 50% of the time. Which is about the same percentage you get if you just guess.

RobCoxxy:
I think Microsoft would make a fuckton more money if they instead dropped XBLG subscription to a tenner, or made it free a lŠ PSN.

As XBL already costs the same as a new game, it puts off many players. £100 for 12 months of play would probably kill off any gamers intent on subscribing.

Bad move, drop the price.

I don't know that it does. Gold was estimated at ~20 million subscribers last I checked, which is the majority of people who own a 360. So it seems to me that people are fine with paying <$5 a month. If that doubled, though? I'm not sure.

I'm so glad I just ordered a PS3.

RobCoxxy:
I think Microsoft would make a fuckton more money if they instead dropped XBLG subscription to a tenner, or made it free a lŠ PSN.

As XBL already costs the same as a new game, it puts off many players. £100 for 12 months of play would probably kill off any gamers intent on subscribing.

Bad move, drop the price.

eh what about 12-20 million paying for gold, out of 30-35 or so million. Dropping the price won't bring in enough people to make up for lost revenue. If you go from 50 dollars to 25 bucks then everyone needs to join to make up for it. If you go from 50 to 10 then well you better start selling big time.

I remember when Microsoft attempted to charge fees for the PC version of Halo 2 and Shadowrun. It failed spectacularly as I recall.

Yeah, MS is stupid, but nowhere near that stupid.

I call BS, as I often do on Patchers "predictions".

I seriously doubt they would raise it to $100 a year, even then every couple weeks I see some online store or another selling year memberships for around $33. That and they would probably have a hard time actually implementing it considering they would pretty much have to recall all the cards in stores, and if consumers got wind of it I would expect people to just buy a few years worth of cards on the spot and just avoid the price hike.

CantFaketheFunk:

RobCoxxy:
I think Microsoft would make a fuckton more money if they instead dropped XBLG subscription to a tenner, or made it free a lŠ PSN.

As XBL already costs the same as a new game, it puts off many players. £100 for 12 months of play would probably kill off any gamers intent on subscribing.

Bad move, drop the price.

I don't know that it does. Gold was estimated at ~20 million subscribers last I checked, which is the majority of people who own a 360. So it seems to me that people are fine with paying <$5 a month. If that doubled, though? I'm not sure.

Yeah its roughly 2/3rds of all xbox users who have gold.Then a few have silver and a few have no internet

They wont double the price. If anything I think its gone down already from 60$ USD to a little over 40$ USD for a 12month card at Wal-Mart. If theres anything this article made me think about its that Sony and Nintendo might start charging for their services. Well Nintendo has no reason to as they make a killing off the wii but Sony will most definitely have to do something. Nothing is free in this world, and charging nothing is absolutely hurting Sony.

another of many reasons not to get a 360 and especially Gold Live. ill stick with my future ps3 and its free internet.

Christemo:
another of many reasons not to get a 360 and especially Gold Live. ill stick with my future ps3 and its free internet.

Wait since when was the whim of a analyst guessing whether or not a service will double their price a reason to not buy a 360???

Thats honestly one of the worst excuse's Ive heard to date.

Might as well have said "I dont like 360's because I like PS3's cause its better"

I'm happy paying about £2-3 p/m... if they doubled the price, I'd expect more features.
I've never bought any MS "points" though - don't really see the point.

I think they should do it, ruin their own followers and push them to PC and PS3. It would be their own fault

Id consider selling my 360 if this happens

He clarified this on Neogaf.

michaelpachter:

Yes, I said that XBL would go up to $100 in a couple of years. No, I didn't mean that everyone would have to pay that much.

My point was that Microsoft makes a profit from XBL, and is interested in increasing that profit. They don't want to give anything away for free, and porting of Xbox 360 games to PC that have a multiplayer component exposes them to the potential that some users will quit XBL and buy the PC version to play multiplayer.

As far as I know, Microsoft has no present plans to increase any pricing. However, XBL started up with the original Xbox launch almost 8 years ago, and we have not seen a price increase. I understand that PSN is similar and is free, but PSN is only "competition" for either people who have both an Xbox 360 and a PS3 or for people who haven't bought a console yet. I think that Microsoft will wait until the installed base is quite large (perhaps 50 million Xbox 360s), and start to raise price on the existing user base. They can offer one or two years free to new console purchasers, and still raise the price for the existing user base.

My guess is that we'll see additional tiers, with the current Gold subscription rising modestly to $60 or so, but there is the potential that a Gold membership might lose some features. As Microsoft builds the number of features offered (Netflix, Twitter, Facebook and Last.fm in the past 12 months, who knows what is coming in the next two years), it could offer a "premium" service that bundles all of these for an extra $3/month. I think of it the same way as cable TV--a flat rate for "basic" cable and a higher rate for various bundles.

I think that there is a desire on the part of several publishers to charge for online game play. EA held out for a couple of years by not putting sports games on XBL, since the company felt it should get the money from subscribers who played its games. Activision has made comments lately about monetizing online game play (think COD), and I could see a premium service that offered discounts for DLC and included some kind of online multiplayer that wasn't available on XBL Gold.

In any case, the addition of new features on XBL seems to me to be driven by a desire to raise price ultimately. I could be wrong; as many of you know, it won't be the first time.

Platinum sounds sensible, and us Brits pay 40GBP for the serivce for a year at the moment. So apparently either we're better off or America is getting it cheaper anyway.

Oh dear. :(
This guy better be wrong...if he's right, then me and 30 of my closest friends will go to Gates' house and chop his hands off.

Xbox Live increasing it's subscription price would be like suicide...

Hopefully it won't get more expensive, it is worth 50$ but not 100, although I would probably end up paying the 100.

Well - I don't pay for gold and don't intend to, just not a big online game player and also owning a PS3, Wii and PC capable of handling games better than any of the consoles I'd pick it up on for that (plus PC games are generally cheaper) if a game ever came out that I felt compelled to play online.

Hell, I don't even play WoW online, just choosing to play on my own on me own server - antisocial gaming rules :D

Timelord91:
I think they should do it, ruin their own followers and push them to PC and PS3. It would be their own fault

Id consider selling my 360 if this happens

They are trying to push people away from PC because most PC gamers pirate games, thats why you don't see as many big name PC exclusives, they don't do well anymore unless they have some really buffed up security and even then people crack it and it just makes it harder for honest people.

If they raise the price on this I will literally stop playing Xbox Live. It's bad enough that the wireless adapter costs 100 dollars when all the other consoles give it out for free.

Apackof12Ninjas:

Christemo:
another of many reasons not to get a 360 and especially Gold Live. ill stick with my future ps3 and its free internet.

Might as well have said "I dont like 360's because I like PS3's cause its better"

it is, trust me.

CantFaketheFunk:
snip

That's it I'm sick of hearing about Pachter, I'm now going on a Pachter diet, a Piet if you will. Funk could you do me a favor and from now on when an article has to do with Pachter just put up a warning for me. Something like "Darrkon do not come in, contents dumbening" Or whatever you feel is good.

I hope they don't raise the price, because it's at a good affordable level right now. They'd lose customers if they raised it.

Am I glad I applied common sense when asking myself the question, "Is it worth paying a comparatively horrendous amount of money for the privilege of being hooted and cussed at by people I consider a waste of biomass?"

They would lose alot of players, but they would ultimately get more money, since most people are suckers, and would stay. Capitalism at its best worst errr, well, capitalism.

i don't see it happening

but it might be because i'm on the bubble about paying the current $50 for it, and $100 would make it certain i wouldn't

Christemo:

Apackof12Ninjas:

Christemo:
another of many reasons not to get a 360 and especially Gold Live. ill stick with my future ps3 and its free internet.

Might as well have said "I dont like 360's because I like PS3's cause its better"

it is, trust me.

Thanks for proving my point =p

Apackof12Ninjas:

Christemo:
another of many reasons not to get a 360 and especially Gold Live. ill stick with my future ps3 and its free internet.

Wait since when was the whim of a analyst guessing whether or not a service will double their price a reason to not buy a 360???

Thats honestly one of the worst excuse's Ive heard to date.

Might as well have said "I dont like 360's because I like PS3's cause its better"

hey m$ has been ALL about the TCO (total cost of ownership) of their products over their competitors. so having to pay an extra $50/yr and possibly $100/yr just isn't good for their whole TCO

as much as they like to say it's a "better value" i can do all the same stuff with the PS3 for online as they can do with live AND it's free. so really raising the price when others is free is stupid and going to cost them in the end because people won't want to buy their consoles if they have to pay to get online, when the other 2 are free

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