Why the smartphone model is wrong for consoles

[Mr Puggsly]

VGKing said:

We've all heard the rumors about the next Xbox being sold at $300 w/ a 2 Year XBL contract @ $15/month. At first this might seem like a great deal but it ends up being more expensive than shelling out the $500 right away. That's not the worst of it though. If people aren't smart enough to do the math and waste their money, I have no problem with it. It doesn't effect me and it won't affect smart people.

Here's where it starts affecting everyone.....if this subscription model becomes popular then the $500 console won't drop down in price. If this $300 console sells 10million within its first year, why would Microsoft drop down the price? People are already buying it and its only going to be more popular with time. This isn't just giving consumers options anymore, its about keeping profit margins high and keeping you tied to a single console. It's not good for consumers. Its only good for Microsoft or whoever else decides to follow this pricing model. 

1. You're getting worked up over rumors. Stop it.

2. It may be a great deal to people who don't want to spend a large sum of money at once.

3. Quit worrying about how people spend their money. Especially since we're talking about relatively small amount of money.

4. If the subscription model becomes popular, than that means consumers are happy with it. Competition will still exist.

5. Consumers will have options. There are always options. Xbox Live is a pay service and its been very successful, but I don't see MS's competition doing the same thing.

6. If others decide to adopt the subscription model, their prices will still have to be competitive.

You worry too much VGKing. You worry too much about MS in particular.