Report: Xbox 360 to Sell for $99 with Two-Year Xbox Live Contract

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Most of us wouldn’t own an iPhone or Android smartphone if a carrier like AT&T or Verizon wasn’t subsidizing some of the cost. Now it looks like gamers may be able to expect similar deals — at least with the Xbox 360, if the rumors are true.

The Verge has word from “sources” that Microsoft will start offering a $99 package that includes a 4GB Xbox 360 with Kinect at its Microsoft Stores starting as early as next week. The catch? Buyers apparently also have to sign up for a two-year subscription to Xbox Live Gold at $15 per month, with an early termination fee if subscribers want to cancel their service.

For some of the Xbox’s most popular series — including Halo and Call of Duty — an Xbox Live Gold membership is almost required, seeing as the expansive multiplayer battles are a big part of the appeal to hardcore gamers. What a deal like this could do is entice more casual gamers to pay for a membership, especially as Microsoft attempts to position the console as more than just a gaming device.

Consider Microsoft’s rumored streaming music service, apparently code-named Woodstock. While mom and dad might not pay to blast aliens online all day, they might pay $15 a month to watch TV shows on Netflix (which currently requires an Xbox Live Gold membership) and jam to Jefferson Airplane tunes using Woodstock, should that service require an Xbox Live Gold membership as well.

Paired with the announcement that Halo 4 is coming out on November 6, this is a good sign that Microsoft is pushing for the 360 to go out strong before it releases its next-generation console. It could also be a sign of how companies expect to market consoles in the future.

The PlayStation 3 already offers content from third-party providers, including Amazon Instant Video and Hulu Plus, not to mention it’s the only console with a Blu-ray player. While serious gamers will be counting down the days until Microsoft, Sony and Nintendo release new consoles, non-gamers who are also considering devices like Roku and Apple TV are up for grabs.

Would someone who has no interest in playing Call of Duty pay $299 for an Xbox 360-Kinect package when they could buy a much simpler Roku player for $59.99? Probably not. But cut the price down to $99 and all of a sudden it’s a lot more appealing.

If Microsoft indeed goes through with this, it would be interesting to see if Sony would do this once its new console gets closer to release. I don’t see why after the initial launch rush, any console couldn’t be subsidized with monthly subscriptions. A device solely for playing games is a thing of the past; traditional pricing models could be changing with the times as well.

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