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Xbox 360 deal: $99 with 2-year Xbox Live Gold contract

360 and Kinect

There were whispers last Friday that Microsoft would be offering a budget Xbox bundle: lower up-front cost, offset by a sort of combination payment plan and Xbox Live subscription. Microsoft has just confirmed the deal is real: if you have a Microsoft Store nearby, you can pick up a 360 and Kinect for just $99.

( is a joint venture of Microsoft and NBC Universal.)

You'll also have to sign up for an Xbox Live Gold subscription at $15 per month; existing accounts can be had for as little as $5, but in this case they're adding the cost of the console distributed over two years. The math works out fairly decently for the consumer: the cost of an Xbox and Kinect bundle now, plus two years of Xbox Live, ends up at around $420. With the $99 deal, the final cost is closer to $460. That's $1.67 per month extra for the privilege of not paying full price up front.

The lower barrier for entry, however, is worth a lot in marketing terms. Mobile phone companies have known for years that subsidized phones sell just fine -- far fewer people would have bought iPhones if they had a $600 price tag, even if it meant lower monthly payments after the initial hit. The 360 isn't exactly a must-have item, after more than six years on shelves, but the low price will almost certainly help Microsoft move a few units.

It also extends the cost of those units out two years while getting people hooked on the Xbox Live service. When the two years are up, the 360's successor will almost certainly be available, and the option to continue their Live service right onto the new platform will be tempting.

The catch is that deal is only available in Microsoft Stores right now. You have to show up in person and ask for "offer code 885370366266" to get signed up. Check here to find whether there's a Microsoft Store near you.

Devin Coldewey is a contributing writer for His personal website is