In a page out of the mobile industry’s playbook, Microsoft is testing a subsidized Xbox bundle via their branded storefronts. Instead of paying $300 up front for a 4GB Xbox 360 console with Kinect, and potential $60 annual service fee covering online services, this dealio requires only a $99 investment… followed by $15/month for the duration of a two year contract. And, like a cell carrier, Microsoft will run a credit check if you choose to partake and imposes an early termination fee (ETF):
Mathematically, the “promotion” doesn’t make a whole lot of sense, unless you’re strapped for cash, as it ends up running $40 more at MSRP over a two year period ($460 vs. $420). More importantly, both Xbox 360 hardware and Xbox Live Gold are frequently offered below MSRP.
MS should be applauded for attempting to lower the barrier to entry. But this isn’t the correct solution. A better approach would be adding a Roku-esque Xbox Live streamer to the mix. However, we’ll continue to recommend the competing PS3 over the Xbox while service fees and Microsoft “Points” remain in effect.
