Is this business model the future for console hardware?

European phone carrier O2 has started selling Xbox One and PS4s using a contract model similar to those used when purchasing smartphones in the UK. The Xbox One plan, which is available today, will get you an Xbox One for £99.99, with a two-year contract at £52 per month. In the US, that would be about $164 down, and $85 per month. All told, customers will end up paying roughly £1348 ($2205 USD) when the contract has been fulfilled.

Unlike the phone plans we might be used to the console, the console contract comes bundled with games and a Windows Phone, which sort of explains the high price tag. In addition to the console, the contract comes with FIFA 14, a 12-month Xbox Live Gold membership and a Nokia Lumia 1020. O2 sells the Lumia 1020 for £620.00 without a contract.

O2 unveiled a similar bundle-plan for the PS4 last week. Unlike the Xbox One, the PS4 has two payment plans: Customers can either pay £89.99 upfront and £52.99 per month, or put down £129.99 and pay £46.99 per month. Both plans includes a PS4, a Sony Experia Z1 smartphone, Killzone: Shadow Fall and 12-month subscription to PlayStation Plus.

Microsoft has experimented with selling consoles on contract in the US in 2012, offering a Xbox 360 console with Xbox Live Gold for $99 down and $15 per month for two years. At the time, the offer prompted a surge of speculation and rumor-mongering over whether the console we now know as Xbox One would follow that model.

Source; MCV UK

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