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Consoleation Prediction: XBL Increase for 2010

There have been two interesting developments this week that could very well affect Xbox Live subscribers in 2010 and beyond.

The first development comes to us courtesy of everyone’s favorite video game industry analyst, Michael Pachter. In a discussion with GameTrailers TV, Pachter seemed to indicate that the price of Xbox Live could jump to as much as $100 per year. The article that I’ve linked to doesn’t directly state that Pachter said this verbatim, but the inference can certainly be made. While Pachter is quite respected in industry circles, his track record is rather mediocre when it comes to predictions… so this development raised a yellow flag.

The second– and more telling– development comes from Microsoft spokesman David Dennis. Dennis attempted to add some clarity to the Pachter remarks by saying:

I don’t foresee a scenario where we’re going to double the price of Live anytime in the next couple of months.

That is a red flag, ladies and gentlemen.

Spin it any way you want; maybe he was misquoted, or perhaps he was speaking on his own off the cuff instead of delivering prepared remarks. Either way, I don’t buy it. I believe that Dennis is telling the truth… mostly. I do believe that a price increase of some sort is coming for Xbox Live subscribers in 2010. I honestly couldn’t tell you if it’s going to be a $50 increase like Pachter cited, but I tend to think that Microsoft is willing to stake its reputation on that notion that the quality of its online service– along with some nice new features like 1080p high-definition streams and the integration of services like Last.FM, Twitter, and Facebook to go with the Xbox 360 Dashboard– should make any increase worth paying.

This is a big risk for Microsoft, especially at a time when Sony is gaining momentum thanks to a recent price cut and still boasts free online services and gaming. If you were to read reaction across the web, you’d think that Microsoft was crazy and should prepare for mass cancellations from Live subscribers. On the other hand, tons of people are still playing Halo 3 (and ODST) online, and even more still prefer to play multiplatform titles like Modern Warfare and Borderlands over the Xbox Live service. Will tens of thousands of users suddenly drop Xbox Live and even consider going the PlayStation 3 route?

I doubt it.

I know that price increases are a bad idea, especially in a time of economic difficulty. You’d like to think that the recession’s over, but recent spikes in energy costs may put a dent in any recovery and unemployment is still painfully high. As difficult as it may be to come up with extra money to renew Xbox Live from year to year, it’s more difficult to completely drop a console and start fresh on a new platform. Even trading in a 360 and games nets users a significant loss from what everything cost to begin with, and then having to replace favorite games with PS3 versions istead of 360 ones (plus any associated DLC) is rough. The more likely scenario is going to be limited cancellations and lots of griping… but begrudging acceptance, provided that the increase either isn’t too high or is complemented by some decent perks and incentives.

I’d like to think that my prediction is going to be wrong, and if so, I’ll be no worse off than Pachter– except that he gets paid for his predictions, right or wrong. In any event, I’ll be waiting and watching to see what moves Microsoft will make to the Xbox Live structure in 2010.

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  1. Matt Altieri
    October 24, 2009 at 7:05 AM

    God, I hate Pachter… it’s really to the level of irrationality, how much I dislike him. However, the fact remains that he makes these wild predictions and never really provides the data he used to make his projections. He’s the gaming industry’s shady fortune teller, with an obvious love of controversy.

    While I disagree with your prediction (in part because of the tenuous Pachter connection… I’m petty), I think your analysis of a price increase scenario is spot on. If they do raise the price, I’ll probably be in the cancellation camp, for reasons economic rather than indignant. Unless it’s something piddling like a $5 markup, I simply won’t be able to justify the cost.

  2. October 24, 2009 at 10:16 AM

    If the price of Xbox Live does jump to $100, unless there are some amazing new features coming (in addition to the Fall Dashboard update), I’m most likely going to let my subscription lapse.

    I don’t use Facebook or Last.fm. Sure, Twitter integration is nice, but it’s just a normal Twitter client. I can use Tweetie on my iPhone while playing to get an even better experience (since I can read and post without quitting my current game).

    I do like multiplayer games, and will be sad to lose that option, but I don’t play them enough to warrant paying double the price. If I have to choose between Xbox Live and 1.5 new retail games, I’d definitely go with the games.

  3. Trist
    August 30, 2010 at 11:04 AM

    Wow Pachter and you were right on the mone ywith a price increase.

  1. October 27, 2009 at 3:37 AM
  2. August 30, 2010 at 11:24 AM

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