Microsoft offers $99 subsidized Xbox & Kinect bundle

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Microsoft announced an ambitious new plan today to help get new customers to buy into their Xbox360 and Kinect gaming system, and it may look familiar if you’ve ever purchased a cell phone.

Microsoft will soon begin selling a 4gb Xbox360 console bundled with the Kinect camera accessory for the low, subsidized price of only $99 in their Microsoft Retail Stores. The catch is that you must agree to purchase 2 years of Xbox Live service at the cost of $14.99 a month. See, looks familiar doesn’t it?

The $99 bundle, when added to 24 months of service at $14.99 a month, comes to a grand total of $458.76 (not including taxes).

Compare this to the current going rate of purchasing the 4gb Kinect bundle and 2 years of service up front: the bundle retails for $199.99, and 1 year of Xbox Live retails for $59.99, for a grand total of $319.97.

So while paying by the month may be more convenient for your pocketbook, it’ll suffer in the long haul. Paying for the console and service up front would save you a whopping $138.79 over the cheaper-upfront subsidized plan.

So why would anyone choose to go with the $99 bundle and contract? Microsoft is hoping to lure more casual customers in with the new plan, with both it’s lower initial investment and the ability to spread the costs out over two years both possibly making the initial plunge a little easier to swallow. Microsoft has been making a big push to re-brand the Xbox360 as a complete “Home Entertainment System” instead of just a video game console by emphasizing it’s multimedia capabilities with Netflix, HBO Go, Hulu and more.

However, do you think customers signing to for a 2 year contract now will be upset when the mythical next generation Xbox come out (as rumored) next Christmas season?

Guess it depends on how “casual” they are.

The offer is only valid at brick and mortar Microsoft retail stores. You can find the voucher for the offer at Major Nelson’s blog.

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