Microsoft Plays With Xbox Live Pricing

Microsoft later this year will offer new pricing for its Xbox Live online gaming service, raising the price of its "starter pack" by $20 and offering a new monthly subscription option for $5.99, the company announced Thursday.

The starter pack includes a year's subscription to the service, a Voice Communicator headset for "talking trash" to other gamers, and one or two sample games. Currently $49.99, the new price for the starter pack will be $69.99, Microsoft said in a statement. It said the items bought separately would cost more than $100.

Pay as You Play

Also this fall, gamers will have the option to sign up for one month of Xbox Live. The option is good for people who want to try out the service or play it only when their favorite sport is in season, Microsoft said. The company also plans to offer a two-month free trial of the service.

The price for a one-year subscription, or a subscription renewal, will remain $49.99. Microsoft also will start selling the Voice Communicator headset separately for the first time this fall, for $29.99.

Gearing Up for E3

The announcement comes a week before the giant gaming conference Electronic Entertainment Expo (E3) kicks off in Los Angeles. Microsoft promised that "exciting new Xbox Live" features will be announced at the show.

The new pricing options apply only to North America; the Redmond, Washington, company didn't say Thursday if it plans to offer new pricing options in other markets.

Playing the Numbers Game

Losses at Microsoft's Home and Entertainment division, which includes the Xbox game console, nearly doubled in the last three months of 2002, the company disclosed in a regulatory filing. The division, which also includes Microsoft's TV platform and PC games, posted a quarterly operating loss of $348 million

The loss grew as the Xbox became available around the world, driving up the division's revenue from $833 million to $1.28 billion. In the video game console industry vendors typically lose money on each console they sell, but try to earn that back when selling games, accessories, and services.

Microsoft and other game console vendors have sought to drum up revenue with the online multiplayer gaming services launched in the past year.

XBox Live was launched in North America in November and competes with a service from Sony Computer Entertainment America, which makes PlayStation 2.

Joris Evers contributed to this report.