Forums - Microsoft Discussion - Why the Xbox Entertainment-For-All Plan is Good for Consumers

The rhetoric across the Internet and these forums here on VGChartz is that the Xbox EFA plan is a scam, a rip-off, and bad for consumers.  The evidence they say is the difference in the final cost between the EFA plan and retail.  However, the reality is that the EFA plan is an excellent purchase option and allows consumers an easy entry point and access to console gaming.

The Xbox EFA plan currently allows consumers to purchase a 4GB Xbox 360 w/Kinect and two games or a 250GB Xbox 360 w/two games for $99.00 with a two year commitment to Xbox LIVE at $14.99 per month. 

The evidence, they say, that the EFA plan is a scam is that the cost of Xbox LIVE is substantially more expensive than the normal monthly cost of Xbox LIVE or the cost of a 1-Year subscription card for Xbox LIVE.  Inarguably it is more expensive, on the face of it.  However if you look at the actual numbers it’s a better deal when compared to some other purchase options.

At retail, both a 4GB Xbox 360 w/Kinect and a 250GB Xbox 360 are $299.99.  In addition, a 1 year subscription to Xbox LIVE is 59.99.  The initial cost for 1 year is $359.98, excluding local and state sales tax.  At the 13th month, this increases to $419.97.

Compared to the Entertainment-For-All option, consumers will only pay $278.88 at the end of one year.  In fact, it’ll take 18 months before a consumer reaches the cost for one of the two Xbox 360 consoles and a 1 year subscription to Xbox LIVE.  A full 5 months into the second year before.  While the consumer who purchases the console and 1 year Xbox LIVE subscription outright has paid an additional $59.99 for another year of Xbox LIVE, the person who makes their purchase under the EFA plan doesn’t reach the $420 amount of an outright purchase until 22 months into the purchase.  Ten months after someone making an outright purchase. 

Again, there is a premium that is paid for purchasing an Xbox console via the EFA plan, 4.5% per year (9% for the term of the contract), $38.74 to be exact or $1.61 per month over 24 months.  Some opponents to the EFA plan have suggested that a credit card would be a wiser purchase. However, compared to the average interest rate of a consumer credit card (20% APR – compounded daily) over the 48 month payment terms, and the consumer is looking at $734.40 that they’d be paying as a final cost.  Far from any type of savings and nearly $300 more than the EFA plan.

Once again, the EFA plan is good for consumers.  It allows a wide array of consumers to purchase an Xbox console without a substantial outlay of funds.  By lowering the cost of entry, this means those consumers have more access to funds for game purchases and the means to better manage and budget their purchases.  The fee for the convenience is only 9% over the term of the contract, one of the most affordable offers available in the industry. 


Months

1

2

3

4

5

6

7

8

9

10

11

12

Early Termination Penalty

$250.00

$250.00

$250.00

$240.00

$228.00

$216.00

$204.00

$192.00

$180.00

$168.00

$156.00

$144.00

Early Termination Cost

$363.99

$378.98

$393.97

$398.96

$401.95

$404.94

$407.93

$410.92

$413.91

$416.90

$419.89

$422.88

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Ownership EFA

$113.99

$128.98

$143.97

$158.96

$173.95

$188.94

$203.93

$218.92

$233.91

$248.90

$263.89

$278.88

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Ownership Retail/1Yr Sub

$359.98

$359.98

$359.98

$359.98

$359.98

$359.98

$359.98

$359.98

$359.98

$359.98

$359.98

$359.98

Cost of Ownership Retail/Monthly

$309.98

$319.97

$329.96

$339.95

$349.94

$359.93

$369.92

$379.91

$389.90

$399.89

$409.88

$419.87

Months

13

14

15

16

17

18

19

20

21

22

23

24

Early Termination Penalty

$132.00

$120.00

$108.00

$96.00

$84.00

$72.00

$60.00

$48.00

$36.00

$24.00

$12.00

$0.00

Early Termination Cost

$425.87

$428.86

$431.85

$434.84

$437.83

$440.82

$443.81

$446.80

$449.79

$452.78

$455.77

$458.76

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Ownership EFA

$293.87

$308.86

$323.85

$338.84

$353.83

$368.82

$383.81

$398.80

$413.79

$428.78

$443.77

$458.76

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Ownership Retail/1Yr Sub

$419.97

$419.97

$419.97

$419.97

$419.97

$419.97

$419.97

$419.97

$419.97

$419.97

$419.97

$419.97

Cost of Ownership Retail/Monthly

$429.86

$439.85

$449.84

$459.83

$469.82

$479.81

$489.80

$499.79

$509.78

$519.77

$529.76

$539.75

       



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You completely failed to address how it is good for people who aren't interested in buying an Xbox. Explain how I will benefit from this.

Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

Biased reviews are a pleasure to read. Just my opinion, of course.

RolStoppable said:
You completely failed to address how it is good for people who aren't interested in buying an Xbox. Explain how I will benefit from this.

That's a tricky one...

I guess that's the reason why this thread is in the Microsoft forum and not the Gaming forum. 



Now you just made me want to buy a PS4 even more.

So its less expensive, till its more expensive.

Before the PS3 everyone was nice to me :(

GT_168 Trophy Card

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EFA should stand for Entertainment for Americans, 90% of the entertainment-options aren't available anywhere else

Hardcore=elitist casuals

Prediction: PS4 will be more powerful and cheaper than XBOX ONE

Adinnieken said:
RolStoppable said:
You completely failed to address how it is good for people who aren't interested in buying an Xbox. Explain how I will benefit from this.

That's a tricky one...

I guess that's the reason why this thread is in the Microsoft forum and not the Gaming forum. 

You act as if the forum sections would prevent anyone from posting about something they aren't interested in. It happens all the time. Approximately 90% of "serious" problems with consoles/games/companies aren't actual problems.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

Biased reviews are a pleasure to read. Just my opinion, of course.

melbye said:
EFA should stand for Entertainment for Americans, 90% of the entertainment-options aren't available anywhere else

Microsoft is really not in control of that, though. Blame the short-sighted multimedia firms who think that they can make it such that their services are tied to national borders, a battle they will lose just as they have lost time and again against internet piracy.



New Smash, New Mains

"Also breakfast is an important part of a nutritious breakfast"

Didn't read it. Let's wait for the reveal instead of basing information on rumors that have not been confirmed.

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Chark said:
So its less expensive, till its more expensive.

If you're living on a tight budget, what is easier to manage?  An outlay of $360 or an outlay of $100 with 24 - $15 per month payments? 

In contrast, Wal-Mart and KMart charge a $5 fee just to place items on lay-away that you'll be picking up in two months.  That would be equivalent to $120 over 24 months, yet people use lay-away all the time because it offers consumers a means of purchasing an items on sale without the full cash outlay at the time of purchase.  Likewise, there are even worse deal in the Rent-To-Own business, where consumers are charged interest rates greater than 90%.  Often tripling or quadrupling the initial cost of the item purchased.

The EFA is 4.5% per year, $1.61 per day, for a total of $38.74 at the end of two years.

  1. Better than a credit card - You pay $15.30 instead of $15.00, for 4 years instead of 2, for a total cost that's nearly $300 more.
  2. Better than lay-away - You pay $45.62 per week instead of $3.75, and you have to wait before you can take home your purchase.
  3. Better than Rent-To-Own - You pay 92% or more over the term of the contract rather than 9%.
  4. And for budgetary reasons, better than an outright purchase - Your inital cost is $360 rather than $100 and at the end of one year, you've paid more than through installment payments.