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Xbox Live price increase 'still incredible value'

Analyst says XBL subscription hike is no surprise

The increase in Xbox Live subscription costs won't affect the service - as it's still "incredible value to customers".

That's according to EEDAR analyst Jesse Divnich, who said that the higher prices were no surprise.

"EEDAR does not believe the $10 price increase will fully affect current Xbox LIVE Gold subscribers until late 2011 and beyond, as Microsoft will likely run numerous promotions allowing users to renew at cheaper rates," Divnich told investors.

"When taking into consideration the numerous services added to Xbox LIVE Gold subscribers over the last eight years, it comes as no surprise that Microsoft would eventually increase the price of a Gold subscription by a moderate amount."

"EEDAR believes the fee increase will do little to impact the positive momentum of the Xbox 360."

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Divnich went on to outline why a more expensive XBL service is still worth it:

"When originally launched in 2002, a Gold subscription cost the same as an AAA video game, $49.99," he said.

"When taking into account for inflation ($50 in 2002 is roughly $60 in 2010) and the additional services available to Gold subscribers in 2010, such as ESPN, Facebook, Twitter, Netflix, Last.fm and Video Kinect, a $10 price increase still represents an incredible value to consumers."

He also suggested that the Xbox has a larger core audience that makes greater use of online features and therefore wouldn't be scared off by higher prices:

"EEDAR data from our active consumer polls indicate 30 per cent of Xbox 360 consumers have played a video game online 15 times or more in the last 3 months, compared to 23 per cent for the PS3 and 10 per cent for the Wii."

"The data reinforces previous notions that the Xbox 360 consumer base is more core orientated and/or that consumers find great value in the Xbox Live service, despite the fact that Microsoft's competitors currently charge no subscription fees for online play."

Microsoft announced yesterday that monthly XBL Gold membership will increase from £4.99 to £5.99 in the UK, with annual US membership jumping $10 to $59.99.

What are your thoughts readers? Will XBL still represent value for money at the higher price-point?

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