Why the $99 Xbox 360 is compelling

Microsoft has confirmed the recent rumor that the company will offer a $99 Xbox 360 with a 2-year subscription agreement for Xbox LIVE at $14.99/month. Beyond lowering the barrier to entry for casual gamers, the offer could be a very attractive deal for people looking to cancel cable or even for parents trying to teach money management to young gamers.

Here are the details:

  • $99 with 2-year Xbox LIVE Subscription at $14.99/month
  • 4GB Xbox 360 system with Kinect
  • $250 cancellation fee, reduced by $12/month after the first five months
  • Only available at Microsoft stores

It’s doubtful that this deal will have a substantial impact on most gamers, who likely already own an Xbox 360. What the offer does is lower the barrier entry for anyone considering a console purchase. While it will cost more in the long term, $99 is easier to pay than the current $299.99 4GB Kinect bundle. Purchasers will end up paying $459 with the offer, versus $419 if you purchase upfront with two years of Xbox Live at $60/year. So why is it compelling?

For anyone looking at cutting the cord, the entire Xbox Live experience has become an interesting alternative. If you want all of your local channels, you can pick up an HD antenna off of Amazon for around $40. Add in Hulu Plus for $7.99/month, Netflix streaming for $7.99/month, and don’t forget to throw in ESPN3 for streaming sports. Crunch the numbers and you’re looking at $130 upfront and  $31/month. Last I checked, my cable bill was well over $31/month and installation was around $100. While you might not get all of the channels and shows you love, it’s certainly shaping up to be an affordable alternative.

Let’s be honest – gaming can be an expensive hobby. Purchasing a system and related peripherals can be pricey, and that’s before you start looking at online subscription fees and games. The lower price improves accessibility to people who are starting getting into gaming or for parents trying to teach their children money management. This is a perfect “teachable moment” to discuss the pros and cons of purchasing an expensive item outright versus paying a little at a time at a greater overall cost. For a kid with an allowance, $99 upfront and $15/month can be a lot easier to stomach than nearly $300 at the register.

What’s the downside? It’s currently only available at Microsoft stores, so access to the offer is limited. If the company added an online purchase option, it could have a much larger impact on the market.

So are you going to buy an Xbox 360 for $99 with a $15/month charge? What else makes this offer compelling? Let us know in the comments.



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Author: Dominic Garcia View all posts by

4 Comments on "Why the $99 Xbox 360 is compelling"

  1. Tim May 8, 2012 at 1:34 pm -

    Interesting perspective. I’m currently a Comcast xfinity subscriber and for $60+ a month I don’t even get HD. Yes the movie on netflix isn’t always the newest release but for $7.99 I can live with that. This $99 xbox deal is definitely a more flexible and cost effective alternative to cable.

  2. hpnotiq9 May 8, 2012 at 1:37 pm -

    I haven’t thought about using Xbox Live to “cut the cord.” Sounds like a great idea! I’m paying over $100/month on cable and it sucks.

  3. inzautoe May 8, 2012 at 5:05 pm -

    Agreed. As a long-time console owner, it’s not the way I look at these machines. My gut response is to say, “please focus on the games,” but I guess it works for other people.

  4. Guest May 9, 2012 at 5:39 am -

    Bottom line is its a big mistake thats going to flop…………..

    most gamers already see its a rip off

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