Is Microsoft Ready to Take On Netflix and Amazon.com?

May 21 is going to be a big day for Microsoft (NASDAQ: MSFT  ) as it rolls out its next-generation gaming console, but it may also be introducing a digital video service.

Tech blogger Paul Thurrott is hearing that the new Xbox system will retail for $499, but that the software giant will also have a $299 price point for buyers committing to a $10-per-month subscription plan. The $10 plan would naturally cover the $200 price cut and perhaps an Xbox Live Gold subscription, but there has to be more than that.

Amazon.com (NASDAQ: AMZN  ) has been beefing up its Amazon Prime value proposition by loading up on digital goodies, including a streaming video service that is a distant competitor to Netflix (NASDAQ: NFLX  ) .

Microsoft has made no bones about making its gaming console an entertainment hub for all things video. Netflix CEO Reed Hastings did leave Microsoft's board last year. 

In this video, longtime Fool contributor Rick Munarriz explores the reasons that Microsoft may be ready to take on Netflix and Amazon with its own online video buffet.

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Read/Post Comments (6) | Recommend This Article (1)

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  • Report this Comment On May 01, 2013, at 9:18 PM, KorbanDallas wrote:

    Well, since Netflix decided to insult by tweeting so many Conservatives and teaparty'ers, then I would definitely, in fact, gladly, considerer changing to some another service.

  • Report this Comment On May 01, 2013, at 9:53 PM, rich1000sf wrote:

    Microsoft always looks good on paper ahead of the actual release, but their implementations are dated and buggy. The high-level big points all look lined up, but they can't get the little details right that make the difference in very competitive spaces.

    I recently just tried skydrive. It crashes and just doesn't feel right.

    I'd expect their netflix competitor to take the same belly flop as zune.

    Too bad, I still have some msft shares buried in my ira from the 90's.

  • Report this Comment On May 01, 2013, at 11:45 PM, aelagrasse wrote:

    Replicate, Assimilate, Dominate then Extricate.

    MS S•U•C•K•S

  • Report this Comment On May 02, 2013, at 1:28 AM, Bookoo327 wrote:

    The rumored $10 monthly fee is going to be towards the Xbox Gold membership and would only be a 2 year commitment.

    It doesn't necessarily seem to be a bad deal because it works out to be:

    $620

    [$499 + $120 (2 years of gold at the standard $60 per year although you can normally get it on sale for $45 a year)]

    $540

    [$299 + $240 ($10 subscription fee for 2 years)]

    I don't see this feature/tactic specifically attacking Netflix or amazon, but there have been other rumors that make it sound like it is trying to be more of an entertainment box.

  • Report this Comment On May 02, 2013, at 3:14 AM, Risky88 wrote:

    I don't really care for anything that company makes

    In college I specifically showed in a class presentation on how buying the lowest end microsoft gaming products actually costs their consumer more than double, if they instead just bought a playstation,

    I absolutely hate companies that nickel and dime customers for every penny they can.

  • Report this Comment On May 02, 2013, at 3:58 AM, Clint35 wrote:

    I'm sure netflix and amazon are really quakin in their boots,lol. This is just one more area for softie to get into too late and screw it up and overcharge everyone for inferior service and an inferior product.

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