Analyst Says Live Price Increase Won't Hurt Microsoft

| 31 Aug 2010 08:06

How will the Xbox Live price increases affect the 360? Well, according to EEDAR analyst Jesse Divnich, not very much.

If you're expecting yesterday's announcement of a price increase for Xbox Live to spell the doom the Xbox 360 and send everyone to the PS3 or Wii, Divnich says not to hold your breath. In a note to investors, he said that the raise hadn't come as a surprise, and that the effect on the 360's "positive momentum" would be minimal.

Divnich says that the increase - the first since the service launched - is in line with inflation and when additional features like Netflix, Twitter and ESPN are taken into account, the service represents "incredible value to consumers." Divnich added that despite the cost involved with Xbox Live, EEDAR's consumer polls suggested that Xbox 360 owners played more games online than either PS3 or Wii owners. He also said that the increases would be unlikely to affect current subscribers until late 2011, as he expected Microsoft to run a number of promotions allowing existing customers to renew at a lower rate.

It's easy to fall into the trap of thinking that Microsoft is being greedy, but Divnich's comments help put the increase into perspective. There's always going to be a certain amount of customer dissatisfaction when something becomes more expensive, but as Divnich points out, the relative cost of the service will be the same as when it launched in 2002, and today's Xbox Live offers a lot more for your money.

Source: Edge

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