Last week, it was rumored that Microsoft was going to start carrying 4GB Xbox 360 and Kinect bundles for $99 and a 2 year Xbox Live subscription at their stores. Today they have formally announced that this is true and will be carried only at Microsoft Stores.
Microsoft’s new bundle is aimed at customers that have passed on buying a 360 due to its high cost. To compare this bundle against what is out there, the same bundle but without the subscription sells for $299, the Wii is priced at $149 and a 160GB PS3 is priced at $249. Here is where the subscription comes into play, in order to get the bundle for $99, customers must sign up for a two year contract which is $9.99 a month for Xbox Live Gold. For those who are Gold subscribers, that comes out to about $240 for the 24 months/2 years although you can by a 12 month subsription for $60 a year. The only catch is that if customers want to cancel their subscription before the contact is up, they must pay an early termination fee that can run as high as $250.Microsoft has not said if they will be offering free access to streaming content from cable and sports partners with the bundle.
In my opinion, this seems to be a smart move on Microsoft’s part. They can quickly convert customers who haven’t bought a 360 yet with this program by setting a low bar of entry. People who already have a Netflix DVD subscription can now use the streaming service to access a large library of movies and TV shows. Also, even if those who don’t have Netflix, its only $7 a month. Combine that with free services like YouTube, Crackle, Twitter, FaceBook and other apps makes the 360 an attractive multi-purpose system. Hopefully more information as if this will be extended to other 360 models and other retailers as E3 is only a month out. It will also be interesting to see how Nintendo and Sony will react to this bundle.