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 |
