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Overly eager gamers looking to save money on a next-gen gaming console would do better to avoid an offer recently launched by ISP Vox.
The company offers rental contracts for Microsoft’s Xbox Series X and Series S, allowing customers to borrow one of these consoles with monthly payments.
These contracts are offered for 12, 24, or 36 months, with fees that decrease as the length of the contract increases, but the total amounts increase.
In one of these packages, you can get the Xbox Series X with a 36-month rental at R720 per month.
While this amount would seem attractive compared to its cash price of R11,999, the math shows that this option is a very bad deal.
R720 monthly payments over 36 months would result in an astronomical R25,960, more than double the cash price of the console.
In particular, this would equate to an annual interest rate of just under 80% if it were a credit purchase.
Alternatively, the Xbox Series S can be rented at R420 per month for the same period.
This would compound to a total of R15,160 over the rental period, compared to its cash price of R6,999.
Once again, the difference in price – R8,161 – is more than the console itself.
To top it off, the console remains the property of Vox when the contract term ends, which means it must be returned or the contract will have to be renewed.
Buying on credit is better
What is particularly concerning about this offer is that it is more expensive than buying a console on credit.
There are several credit providers that will allow you to pay for the consoles monthly and keep them at the end of the day.
Mobicred is one such provider, which allows consumers to make online purchases on credit at a custom annual interest rate.
Purchasing Series X through Mobicred on Loot, for example, would cost R1,097 per month for 12 months with an interest rate of 17.5%.
This does not include the initial registration of R570 and the monthly administrative fee of R39.90.
Even taking the latter into account, however, the total cost of the console after it has been paid for would be R14,212.80, around R2,200 more expensive than when purchased with cash.
By comparison, renting the Xbox Series X from Vox during the same period would incur a monthly premium of R1,620 and a total cost of R19,440.
In short, this means that it is more expensive to rent than to buy on credit, and at the end of it all, you can’t even keep the console.
The following table shows what you would pay for the Xbox Series X and Series S during the different rental periods with Vox, compared to buying it on credit from Mobicred at an annual interest rate of 17.5%.
| Xbox Series X | S: rent versus credit purchase | ||||||||
|---|---|---|---|---|---|---|---|---|
| Vox | Mobicred | |||||||
| Xbox Series X | Monthly payment | Full payment | Monthly payment | Full payment (includes registration and administrative fee) |
||||
| 12 months | R1,620 | 19,440 R | R1,097 | 14,212.80 R | ||||
| 24 months | R900 | 21,600 R | R596 | R 15,831.60 | ||||
| 36 months | R720 | R25,920 | R430 | 17,486.40 R | ||||
| Xbox Series S | Monthly payment | Full payment | Monthly payment | Full payment (includes registration and administrative fee) |
||||
| 12 months | R950 | 11,400 R | R640 | 8,728.80 R | ||||
| 24 months | R520 | R12,480 | R347 | R 9,855.60 | ||||
| 36 months | R420 | 15,120 R | R251 | 11,042.40 R | ||||
Cancel won’t help
Those who have already subscribed to this offer will have no choice but to put up with it.
Like most device contracts that can be taken with mobile networks, canceling is not really an option.
According to the Vox Terms and Conditions, cancellation of the contract would incur a penalty.
The fee would equal the “total remaining monthly payments for the rental period,” effectively rendering the cancellation useless.
However, what adds insult to injury in this case is the fact that paying the fine for canceling a smartphone contract usually means that you still get the device.
With the Vox rental agreement, it will be out of your pocket and you will not have a console to show.
Vox responds
MyBroadband contacted Vox to ask if they knew that their rental contracts were much more expensive than paying the consoles on credit and asked the company what benefits this product offers instead of buying it directly.
The CEO of Braintree, Vox’s Microsoft consulting and integration division, Heath Huxtable called the introduction of rental options by the ISP in the local market as “innovative.”
“Gaming as a service (GaaS) has never been tested in South Africa and this was our first foray into this space,” he said.
“The COVID-19 pandemic has made gaming big business and as such, Vox’s goal has been to achieve GaaS by providing an affordable and accessible gaming experience for the masses,” Huxtable said.
He explained that it was important to note that Vox does not calculate monthly payments based on interest rates and that the company assumed the full guarantee and risk of the contract device, with a replacement in case of possible malfunction within one day.
“Our intention has never been for customers to be done with hardware at the end of their contract, but rather to have the flexibility to upgrade their device at the end of the contract, or better yet, have the ability and flexibility to move on and off devices to half of the contract, ”he added.
Huxtable noted that Vox will expand its offering in package options such as fiber-optimized connectivity for home games and peripherals, as well as build a community of tournament games.
“The bottom line is that we want to create a gaming experience that is affordable and accessible to everyone,” Huxtable said.
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