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Pilot program for $99 Xbox 360 bundle introduced at Microsoft Stores
Pilot program for $99 Xbox 360 bundle introduced at Microsoft Stores
May 7, 2012 | By Eric Caoili

Microsoft has formally announced its $99 Xbox 360 and Kinect bundle -- which undercuts the prices of rival systems by requiring a two-year paid subscription -- as a part of a pilot program at its retail Microsoft Stores.

This bundle is not only cheaper than other current generation home consoles, it's priced to compete against other media-centric devices like Apple TV and Roku. Microsoft has had success positioning Xbox 360 as an entertainment hub, as more than half of consumers spend more time with the system's media services than its games.

Microsoft will likely be able to attract consumers who've passed on purchasing an Xbox 360 before due to its initial high cost. For comparison, a standard 4GB Xbox 360 and Kinect motion-sensing accessory bundle (the subscription bundle also includes a 4GB console) sells for $299. Nintendo's Wii sells for $149, while Sony's 160GB PlayStation 3 model is priced at $249.

With this subsidized bundle, consumers must sign up for a two-year contract and pay a $14.99 monthly fee for Xbox Live Gold membership (coming out to $360 after 24 months). If they decide to cancel their subscription before their contract is up, they must pay an early termination fee that can run up as high as $250.

So far, the deal is only available through Microsoft's 16 retail stores. The company said it's testing the bundle's new pricing model as part of a pilot program, and will study how customers respond. It hasn't yet discussed plans to bring the bundle to other retailers.

Microsoft also hasn't said if it will offer free access to streaming content from cable or sports package providers with the bundle, as was rumored when reports of the bundle's existence emerged last week.

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Isaiah Taylor
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Well Sony, it's your move now. This holiday is gonna be a bloodbath if they don't come up with an equally shady marketing strategy.

k s
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MS are masters of shady deals I don't think sony stands much chance.

Alan Rimkeit
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I am sure Sony will rise to the "challenge" of doing a copy-cat maneuver. Not that I would ever buy into such a pile of BS, but I know lots of people will. I see this as good for both Sony and Microsoft, but bad for customers. Of course no one is arm twisting anyone to sign any contracts. Such is the way of business. Let the buyer beware.

Andrew Chen
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Agree on your point that Sony probably needs to drop price this fall or before but not understanding what is shady about this new deal. It subsidizes cost of a 360 for customers (and I agree with those here that doubt there are many) who for some reason can't or won't plunk down the 3 bills upfront.
Its not for everyone, and its not meant to be.
Unless this is a precursor to a real price drop of the main system bundle later this year...

Travis Griggs
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I'd like to think Consumers are smarter than that, but sadly they aren't. I'll stick with my free online with Sony...

Glenn Sturgeon
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I don't think this will make much if any differance in 360 sales.

Kenneth Wesley
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Does anyone know when you have to sign the 2 year contract?

Wylie Garvin
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Does anyone know someone who wants an Xbox 360 but doesn't already have one? If they can't afford it at $299, is $99-plus-a-subscription-contract really an appealing option?

This bundle seems to be targeted at cash-strapped consumers who have no willpower and/or can't do math...

Ali Afshari
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I think those kinds of consumers are the exact targets here.

Jack Lee
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Everyone needs to chill out a little bit about this. The price differential isn't that much (about $50-$60), and the ability to spread that cost over two years can be quite advantageous. I know we've all been taught that you should always pay up front because it's cheaper, but that's not actually always true. The value of a dollar in hand today is greater than the value of a dollar promised tomorrow. Things like increasing income (say I only make a little money right now, but I will be getting a big raise in a year) and inflation (though that's not a huge factor) can actually make this deal fairly appealing, even for people who realize that they're paying more in total eventually.

tl;dr economics isn't quite as simple as you may remember.

Cody Scott
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considering it comes with connect, and most people who want a 360 will want live in the first place, the $120 Live fee covering the 2 years is still cheaper than the 360& Kinect bundle

Eric Pobirs
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This is scarcely a shady deal. It's pretty standard fare in a lot of products and isn't the first such offering on a console. Remember when Sega gave away the Dreamcast for $50 if you made a two year commitment to the Seganet ISP?

This is a much better deal than that as the modern consoles do vastly more. It is those extended functions such as Netflix that are the main selling point here. The boxes that offer to do stuff like Netflix and Hulu for $99 are horrible. I tied a bunch of them and gave up. They just don't compare well to a more costly device like a current game console. Smart TVs and Blu-ray players with network functionality? Still awful by comparison. Painfully slow with wretched interfaces.

Merging a rent to own model witht he subscription model of the paid media services seems like a good maneuver. It generates some revenue and adds to the installed base for potential game sales.