(CBS News) Reports of a $99 Xbox 360 were confirmed Monday, when Microsoft went live with the deal exclusive at the Microsoft Store.
The deal is for a 4 gigabyte Xbox 360 with Kinect bundle for $99, but there's a catch. In order to get the deal, customers must agree to a two-year contract. The deal structure is similar to mobile phone contracts, where the hardware is subsidized in exchange for a long-term service agreement.
Overall, the deal would save customers about $40. The cheapest Xbox 360 and Kinect bundle is about $299.99 and a year of Xbox Live Gold is $59.99, costing about $460 for the bundle and two-years of Gold. The rumored $99 bundle plus $320 for two-years of Xbox Live Gold would total about $420.
Ultimately, customers will have to choose between flexibility and moderate savings. It's worth noting that if Microsoft were to release the next generation Xbox in the next two years, the Gold subscription should be transferable to the new console.
The biggest question consumers should be asking is if Microsoft will implement the $15-per-month price for Xbox 360 Live Gold across the board. Currently, the stand-alone price for Xbox 360 Live is about five dollars per month.
Microsoft did not immediately respond to CBS News' request for comment.