Reactions: Zune Launch Details

So, given the Microsoft’s press release today, how are you guys feeling about the Zune’s chances? Without having seen the device yet (I might be wowed by the video quality), I’m pretty disappointed so far.

I was convinced that Microsoft didn’t announce any pricing information during the official Zune announcement a few weeks ago because they were being revising their original pricing strategy to be more aggressive. Honestly — $249 for a 30 GB player is not “aggressive”. I completely understand that competing on price may put you at a disadvantage and position you as a “cheaper alternative” in the perception of the consumer. But considering the “death grip” that the iPod/iTunes combo has on the digital media device world, you gotta do better than this.

I will say that I am impressed with the $14.99 price on the “all you can eat” option. This sounds somewhat enticing. (Especially since I just canceled my Napster subscription.) But the strategy that bothers me most is the “79 Microsoft Points Per Track”. The Microsoft “Points” system is a really, really bad idea. I have some exposure to the way that the system works, as it’s the same way that I buy downloadable games and other content on the Xbox 360. You buy points at certain intervals — in the U.S. it’s currently:

500 Points – $6.25

1000 Points – $12.50

2000 Points – $25.00

…and so on…

Seems pretty fair. However, there’s a hidden cost associated with the system. When I buy a content on Xbox Live that costs 800 Microsoft Points, I’m not paying $8.75. I have to buy 1000 Points….leaving me with 200 unused Points (basically money spent that could have gone someplace else, but is instead tied up in these “Points”.) This probably won’t be as big a deal with songs as it is with the content on Xbox Live, but it’s still pretty pointless and needlessly cumbersome.

Sure, 79 Points = about $.99 Cents (or $.9875 Cents, to be exact.) But why the extra layer of confusion? I’m sure someone in the board room raised their hand and took issue with this, but apparently the final decision was to keep a consistent approach to buying content between the Zune Marketplace and Xbox Live. Not such a horrible business idea. Especially considering the fact that long term they are probably trying to make content go seamlessly between the Zune and the 360. But it just seems overly confusing and not worth the effort. And even if you have the ability to buy music by the song (and not buy a card with Microsoft Points), why not just charge my card the 99 cents?

The “Microsoft Points” thing is a small annoyance. The $249.99 cost for the player is the bigger issue. I’m still looking forward to checking it out, but I’m a lot less enticed to make an impulse buy at $249 than I was at the rumored $20 cheaper cost.

Now that Microsoft has release all information (price, release date, accessories, store info) regarding the Zune, we’ll see if the rumors are true regarding Apple’s forthcoming announcement of a true iPod Video. (My gut says that this is it for Apple until MacWorld in January. But it will be interesting to watch this play out.)