Xbox 360 to be bundled with Kinect for just $99 with two-year Xbox Live subscription

A strong rumor points to Xbox 360 being subsidized for XBL subscribers

Microsoft is about to make a major move to lower the price of its Xbox 360 hardware next week, according to a report from The Verge. Sources have indicated that Microsoft is looking to attract customers to sign up to Xbox Live Gold for two years; the company will offer the 4GB console with a Kinect sensor for just $99, but subsidized with a monthly cost of $15 for Xbox Live.

This will be offered at a "range of Microsoft Stores in the US" and the two-year subscription will reportedly also offer some additional streaming content from cable providers or sports package providers. Customers who sign-up for the deal will be covered under a two-year warranty, and similar to cell phone plans, there will be an early termination fee for anyone who breaks the contract before the two years are up.

Microsoft continues to make moves to position its Xbox 360 hardware as a total entertainment box, and it seems clear that the company is looking to put pressure not only on Nintendo's Wii U and Sony's PS3, but also Roku, Apple TV and others.

This sort of strategy lends more credence to those in the industry who've said that consoles will be commoditized. It's all about services now, and the box is merely a means to an end. If this rumor proves true, it's easy to see how Microsoft could offer its next-gen console at a much lower price to Xbox Live members who commit to the service for two years or more. Perhaps we'll get a glimpse into the company's strategy during its E3 press conference on June 4.

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Latest comments (10)

robert troughton Managing Director, Coconut Lizard5 years ago
This is exactly what I've been telling people for 3 years that all the console manufacturers should've done... instead of making PSN free, for example, Sony should've subsidised the cost of PS3 by releasing it at 100 with a 20 per month subscription (on a 2 year minimum term)...

This could definitely be the way to go with the next-gen - giving Sony and MS a much greater return on their console sale and, also, keeping the consumer happy that they're not facing a 300-400 bill on day one :-) (the "Direct Debit" mentality).

Edited 1 times. Last edit by robert troughton on 2nd May 2012 6:03pm

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robert troughton Managing Director, Coconut Lizard5 years ago
Also, it's quite a cunning move from MS - with all estimates pointing at the next Xbox releasing within the next 18-24 months, they're locking people in with a subscription plan that will lead into the next console generation...

If they go the way of the mobile phone manufacturers, they can then call up customers after launch of the new console with a nice "would you like to extend your subscription for another 2 years and get the new Xbox for free?" ...
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James Brightman Editor, North America, GamesIndustry.biz5 years ago
@ robert, I completely agree. I think this is very smart and has potentially huge implications for future consoles while putting enormous pressure on Sony and Nintendo.
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Weston Sohlden5 years ago
This is a great way for Microsoft to experiment with different pricing models. Also, with the next Xbox on the horizon, MS is going to have to clear their "dead weight" quickly (out with the old, in with the new). With a significantly smaller amount of risk involved, pricing the Xbox 360 with a monthly subscription is perfect "testing grounds".
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Greg Wilcox Creator, Destroy All Fanboys! 5 years ago
Er... even if this WAS implemented years ago, any and ALL gamers who didn't (and still don't) have reliable (or any) broadband internet access would be shit out of luck.

The industry still ignores this little fact as it happily steamrolls right into a wall, trying too hard to come up with money-making solutions that don't really address a particularly sticky issue.

Sure, other then the lousy 4GB storage (what can you do with that once you start downloading all that content they want you to buy?) MS will get a ton of respect for this model (even though the penalty for canceling is crappy, like any contract- what if you're a new user and HATE Xbox Live? Hey, it could happen).

But at the end of the day, to some people out there, it just means they'll be less likely to buy into a subscription-based console service because they don't want to fork over more than what the console costs and whatever games they buy when they want to buy them.
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Antony Johnston Writer & Narrative Designer 5 years ago
There's also the issue of time commitment. Maybe it doesn't matter if the majority of the demographic is younger, but if I'd been forced to shell out 15/month just to buy a console, knowing full well there are some months where I'll barely have time to play anything, I probably wouldn't have bothered.

The only way I could see this becoming the norm is if the console is free, and the monthly cost very low. Even then, I'm not convinced.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.5 years ago
$15 x 12 x 2 = $360. Ironic figure.
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Nick Parker Consultant 5 years ago
Potentially, the 4GB storage is not restrictive if the intention is to promote the streaming habit among gamers in preparation for next gen. This size 360 just becomes a local client for streaming content hence the 2 year subscription in order to do so.
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Greg Wilcox Creator, Destroy All Fanboys! 5 years ago
@Nicholas: You know as well as I do, that that "potentially" you used is a rigged trap of a word. Nice bow and wrapping paper, but tug on it and it's not going to be a pretty sight when the package is opened.

As someone who's not part of this streaming generation (sure, its fine if you can afford it, but if you can't or live in an area that stinks for it, what are your options again?), I have to ask what those new users are to do WHEN (not IF, because there will be a WHEN) they want to play offline or go to an old save that that's been stored online, or get content that is larger than the storage that comes with the system?

On the surface (if you're a new user looking at that TV ad to come or see a sign in a shop window), it's a magnet that will lure in a lot of users. On second glance, it's a devil's bargain. At third glace, it's a class action lawsuit if someone gets pissed off enough to waste time filing one. Which should happen in about, oh, two weeks or so post-launch, given the race to complain about how these plans operate online and pick up a lawyer looking for a challenge (and a down payment on his new car).

Also, after asking around to 30 friends, 26 hate the idea of a contract-based games console because they hate the one they have with their mobile carrier for one reason or another and have no use for a similar one attached to any console in the present or near future.
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Josh Meier5 years ago
This would be more enticing to me if there was another option to get the XBOX 360 250 GB model without the Kinect for the same price.

I have no need (or space) for a kinect in the room I'd have the XBOX set up in and I don't care for any of the Kinect games anyways.

It's an interesting idea, to say the least. It would certainly help with the fight against the Wii U when that comes out later this year.
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