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Microsoft Announces $99 Xbox 360

This article is more than 10 years old.

Microsoft has confirmed rumors from last week by officially unveiling a $99 Xbox 360 console sold with a two-year contract.

The bundle, which contains a 4GB Xbox 360 console and a Kinect motion sensor bar, costs $99 plus a $14.99 a month Xbox Live Gold subscription which runs for two years.

Owners taking Microsoft up on this offer will pay a premium, albeit a small one. Buying the console and Xbox Live Gold subscription outright would cost $420, compared to $459 for the subscription bundle.

Microsoft has also outlined the terms of the early termination fee for those who do not continue with the Xbox Live subscription for the full two years.

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Taxes may also apply to the early termination fee.

The only drawback I can see to this offer is that it has to be redeemed at a Microsoft Store. If you don't live near one then taking advantage of this offer could be tricky.

This subscription model is an interesting idea as it opens up the console to those who might not want to put down the $299 for the console upfront. It could also help prop up flagging sales that have resulted in Xbox sales falling by almost a half in a year.

The Xbox 360 console is now six and a half years old and in desperate need of a refresh. However, despite the fall in sales, the console has been the best-selling games console in the U.S. for the last fifteen months.

A new Xbox console, widely expected to be called the Xbox 720, isn’t expected to be available until 2014.

It will be interesting to see if this offer helps lift flagging sales. It will also be interesting to see it Sony and Nintendo follow suit and offer a similar subscription model for their games console.