Here is the email I received:
| Dear LeonnSpoon: |
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| Thank you for being a valued member of Xbox LIVE Gold. We hope you are enjoying the many exciting and exclusive features that are included in your membership. We wanted to let you know about an upcoming price increase for your Xbox LIVE Gold subscription and how you can lock in your current price to continue enjoying everything you've come to love about Xbox LIVE, plus all the upcoming additions, including ESPN and Hulu Plus. |
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| Over the past seven years, Xbox LIVE has evolved from an online gaming platform to an all-in-one gaming and entertainment service. As an Xbox LIVE Gold member, you can not only play blockbuster games, such as Halo: Reach with your friends online, you can also stream movies from Netflix* and music from Last.fm right to your TV. You can even connect with friends near and far on Facebook® and Twitter™. Plus, you also enjoy exclusive discounts and early access to game demos. |
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| And we aren't even close to being done. This holiday, Xbox LIVE is adding new Gold features, including ESPN and Video Kinect, with Hulu Plus coming on Xbox LIVE in 2011. |
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With ESPN on Xbox LIVE, you can stream and watch over 3,500 live and on-demand sporting events plus highlights.* |
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Video Kinect allows you to chat with family and friends on the big screen, right from the comfort of your living room—no headset or controller required.* |
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With Hulu Plus on Xbox LIVE you will be able to enjoy a customized Hulu Plus experience that will include Kinect navigation and Xbox LIVE Parties* |
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| Besides launching the new features and titles, we will also be increasing the price of Gold membership on November 1, 2010. The new prices are as follows: |
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1-Month Gold Subscription |
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$7.99 |
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$9.99 |
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3-Month Gold Subscription |
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$19.99 |
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$24.99 |
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12-Month Gold Subscription |
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$49.99 |
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$59.99 |
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| If the renewal date on your current subscription is on or after November 1, 2010, your subscription will automatically renew at the new price, charged to the credit card we currently have on file for your account. |
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At only $5 per month, our 12-month offer continues to be your best value. And, because you are a loyal member, we want to give you the opportunity to lock in your current price with an additional discount. |
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I can understand the math. At $60 per year, I am paying $5/month for a Gold membership. I am fine with it and will reup my subscription.
What I don't get is if they are mentioning new partnerships with ESPN and Huluplus, then wouldn't they be getting some sizeable revenue from EPSN and Hulu for allowing them to advertise on Xbox Live?
Why pass the price on the consumer when the popularity of the service pays for itself with contracts with major network players such as ESPN?
I am confident the advertising revenue alone can pay for the upkeep of the system. Microsoft just used those new advertising contracts to rationalize an increase in subscriber fees because they have short-term quarterly profit forecasts to meet.
