Microsoft Quietly Pulls Xbox Two-Year Contract Plans

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By Ian Sherr and Shira Ovide

This week, Microsoft spokesman David Dennis confirmed the company discontinued the Xbox 360 offer in July. “This program was intended to be a pilot experiment from the start, and Microsoft routinely adjusts the mix of offers available to its customers and this change was simply standard business practice,” he said.

When the program was launched in May 2012, some analysts speculated Microsoft might be testing the approach to use on the then-unannounced Xbox One. But Lewis Ward, a videogame analyst at IDC, said Microsoft executives last year told analysts the pricing shift had been a way to milk waning sales for the Xbox 360, the console version launched in 2005.

“Part of the calculus was probably the numbers of customers who were buying Xbox 360 through that approach tapered off,” Mr. Ward said. The subscription option was for “squeezing the last 10-15% out of the potential market.”

 

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(Published March 12, 2014, in The Wall Street Journal.)