Microsoft recently started a program where you could buy an Xbox 360 for just $99, but it comes with quite a few catches that buyers should be aware of. We have all of the info here.
What Does the $99 Xbox 360 Include?The first thing you have to understand is that this deal - originally offered only at Microsoft stores but is now coming to all U.S. Best Buy and select GameStop stores - is that it is a subscription deal. Yes, you will get a brand new 4GB Xbox 360 Slim, plus a Kinect, for $99, but you will also be locked into a contract that will require you to pay an additional $14.99 per month for 24-months. This deal does include 2 years of Xbox Live Gold, but when you break everything down it doesn't really add up in your favor.
So How Much Will You Actually End Up Paying?
Lets do some maths here. If you bought everything separately it would be $300 for the Xbox 360 4GB with Kinect, and 24 x $8 (per month of Xbox Live) = $192, so $192 + $300 = $492 total. That is if you bought each month of Xbox Live Gold separately for two years. If you paid MSRP of $60 per year, it would be $120 + $300 = $420. Of course, if you bother to do any shopping at all, you'd find Xbox Live Gold for closer to $40 or so per year, which would be $80 + $300 = $380.
If you do this subscription plan from Microsoft, however, you'll be paying $100 (we're rounding up) for the hardware, then 24 x $15 = 360. $360 + $100 = $460. $460 total for something that you should be getting for $420 at most or even closer to $380 if you shop around. It isn't a good deal. And, on top of all of that, we don't recommend people buy 4GB systems anyway since it isn't enough space to actually do anything with on Xbox Live so you'd end up paying another $100+ for a hard drive.
This Sounds Familiar ...
If you've ever had a cell phone with a monthly plan, this is the exact same thing. Just like how cell service providers will sell you a top of the line phone for cheap, or even give it to you, as long as you sign up for a multi-year service contract, Microsoft is giving you the same thing. The only problem is that while the service contract for a cell phone is required for it to function at all, and you can only use a handful of potential providers so people are more than willing to pay it, paying a premium for Xbox Live - something that is not required and something that you can buy for much cheaper outside of this "deal" - is a pretty silly idea all around.
So Why Push A "Deal" Like This?
This is essentially Microsoft's pilot program for what they want to try to do with their next-gen system. They are testing the waters to see if the cell phone-style subscription model will work with game systems. Even if they succeed it doesn't mean you won't be able to buy an Xbox 720 without subscription - they aren't that deluded - but it means the option to either pay it all at once, or pay a lower price at first and then make monthly payments will likely both be offered.
Is There Anyone That Should Consider This Deal?
This Deal Could Work, With Some Tweaks
This deal is a ripoff, but with some tweaks it could work. If the system offered was the 250GB with Kinect for $100 or even $150 or something, it wouldn't be too bad even with the $15 monthly fee. Or if the monthly fee was more in line with what Xbox Live actually cost, or possibly included additional services like Netflix or Hulu+ or something, then it would be worth it. But it doesn't. So it isn't.
For now, we do not recommend the $99 Xbox 360 with subscription plan. Keep saving your money and just buy an Xbox 360 at MSRP. You'll save money in the long run.