Xboxist

Bad Idea: Xbox Live Gold Membership Price Increase

When many people are saying that Microsoft should consider lowering or even removing the subscription fee for its online matchmaking service Xbox Live, the company has surprised everyone by doing the reverse. The company has announced that starting November 1st, it will raise the price of membership to $59.99 per year from the previous price of $49.99. The one-month and three-month rates will similarly be increased. This changes will affect the United States, the UK, Canada and Mexico

Now, you may think that there is method behind this madness. Perhaps the company is planning to roll out a bonus program which offers players free games, like Sony has done with its Playstation Plus program. But you'd be wrong. Microsoft says the price increase is just to cover the basic Gold services they way they exist right now:

"Since launching Xbox LIVE in 2002 we have continually added more content and entertainment experiences for our members, while keeping the price the same. We're confident that when the new pricing takes effect, an Xbox LIVE Gold membership will continue to offer the best value in the industry."

Normally what happens is that a company offers a bundle of services for a set price, and then customers choose whether to purchase them or not. This method of introducing new services and then simply jacking up the price runs contrary to normal business practice, and is more akin to a drug dealer who offers his product at a discount hoping to benefit once his clientele are hooked. The question is, are Microsoft's online offerings addictive enough to keep subscribers at this higher price point?

If you decide to cancel your Xbox Live Gold account, you'll want to make sure that Microsoft stops automatically renewing your subscription and removes your credit card from its file.

[Source: Official Microsoft statement]