Microsoft Confirms $99 Xbox 360 For Those Who Love Pricey Monthly Subscriptions

Last week, it was rumored that Microsoft would be slashing the price on its Xbox 360 game console to a mere $99 with the asterisk that you also sign up for two years of its Xbox Live Gold online service. The company officially announced the offer today, and confirmed just how huge that asterisk is.

As expected, the two-year commitment to Xbox Live Gold isn’t discounted at all. You must pay the full $14.99/month each month for the entire two years. That’s $359.76 (plus applicable sales tax), almost four times the cost of the machine. If you cancel, you also are on the hook for an early termination fee of anywhere from $12 to $250, depending on how long you’ve had the Xbox.

Meanwhile, you can go on Amazon and buy a 12-month Xbox Live Gold membership card for $48.41. For two years, that’s $96.82. Even if you pay full price of $59.99 each, that still only comes out to $119.98 for two years.

So a $99 console with a $360 subscription to a service you might not use. Or a $299 machine with the option to buy a subscription for as little as $4.03/month. You make the call.

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  1. Cat says:

    Worse yet, it’s a bottom dweller 4GB Xbox.

    • Southern says:

      It’s upgradable though, and the HDs are pretty cheap. I got my 250GB for $49, took 10 seconds to slide it in. :)

      • dush says:

        that’s what she said

      • Peffse says:

        You do realize that’s an additional 50% of the upfront cost, right?
        Not exactly cheap, nor is $50 for 250GB a good ratio either.

        • Southern says:

          They may be a bit cheaper now, but when I got mine (just before Christmas) it was a good price. The 320′s were still extremely new (and hard to find locally), and 250gb should be more than enough to fill all my needs anyway. :)

        • amuro98 says:

          Unfortunately, you don’t have a choice about the drive pricing. Unlike the PS3 which allows you to use any SATA laptop drive, the Xbox requires you to use an official Microsoft Xbox 360 hard drive.

          Considering the 250GB drives are $100 new, finding one for $50 is a good deal.

          • dangermike says:

            FWIW, it’s trivially easy to prep any compatible (WD Blue, IIRC) hard drive to function with an xbox. Also, despite being “modding” there is very little chance that MS would be able to detect it and a few solid legal reasons why they would not want to take action against it.

            • dangermike says:

              And after looking at 2.5″ hard drive prices, if the MS part is $100, that might just be the better way to go. Looks like scorpio blue 250′s are around $80 new. I think the one I put in my old xbox 360 premium caddy to replace the constantly full 20 gig OEM drive was like $45 2 1/2 years ago.

              • Southern says:

                Yes, the floods in Thailand, where most HD Controller Cards are made have caused HD prices to skyrocket. :(

  2. El_Fez says:

    Can I go through Rent-A-Center and get this sweet, sweet deal?

  3. Coffee says:

    This really isn’t any different from how cell phone contracts work…you can either suck it up, pay up front for a phone, and get an inexpensive month-to-month contract, or you can get a highly discounted phone and a two-year commitment for a more expensive plan.

    • The Cupcake Nazi says:

      Show me where my monthly plan for a cellphone is any cheaper if I pay full price for the phone…I’ve not seen that for years at any major carrier.

      • Coffee says:

        When I purchased my original T-Mobile account, my plan was 100 minutes + unlimited data + unlimited texting for $30 month-to-month, which was great because I didn’t talk on the phone much. Much cheaper than any comparable two-year contract. When my needs changed, the deal wasn’t so great – unlimited everything but data throttled at 100MB/month, which I don’t mind because I only use data for predownloading podcasts and other non-intensive stuff – but is still only $50 a month, and there are far fewer taxes and miscellaneous fees tagged on.

      • Tmoney02 says:

        As mentioned Above – Tmobile offers this. Take the subsidized phone plan and pay higher monthly or take the cheap plan – but pay full price for the phone, or use your exsisting phone/phone from another retailer compatible with their network.

  4. NeverLetMeDown says:

    It’s a $299 machine, not a $199 machine.

  5. BooBee says:

    The math on this post is completely wrong! The machine is an Xbox 360 WITH Kinect bundled which retails for $299 currently. If you add that plus the cost of the live membership at $60 per year (assuming not using the discounted pre-pays online) it would be about $420 total cost up front. With this new deal from Microsoft the total payment after two years is $459 which is only about $40 more than paying up front with an interest rate of about 8.5% (cheaper than many current credit card rates) more than paying up front. I don’t think it’s a bad deal at all.

    • dangermike says:

      It’s worth noting that 1 year gold subscriptions are frequently discounted to $35 at a number of retailers (or at least, I’ve seen them that low at newegg roughly quarterly for the past 2 years). That would pull it down to $199 for the arcade console + $90 for a kinect + $70 for two years of service = $358. Or about $4 per month in “financing” if you get the $99 deal. And in either case, it would be advisable to get a spare hard drive. 250′s are running about $80 these days. Then again, a fast 16 gig thumb drive for game installations with the 4 gig internal flash for saved games and patches might be a reasonable way to go if you’re on a budget.

  6. MarcZero says:

    It works out to about a $60 finance cost for the machine and Xbox Live service.

    Finance Plan
    ($99 system cost + $14.95/month x 24 months = $458.76)

    Purchase
    ($299 system cost + $48.81/year x 2 years = $397.61)

    So, $458.76 – $397.61 = $61.15. Now, I’m sure this difference is not just the cost of financing, but also absorbs the cost of riskiness because many people who don’t pay up won’t have their costs recoverable for the hardware.

    While it is not a wise choice for consumers to pay more than they need to for video games, it’s a shrewd business move for Microsoft considering this open a new segment of customers that would not be able to afford the high up-front purchase. Now….if you can’t afford $300, should you even be buying a video game system to begin with? That’s a WHOLE other question.

    • BooBee says:

      Great post! I forgot to account for the $99 initial cost (duh).

    • zomgorly says:

      Well that’s if you got the $48 amazon discount. It would be closer to $420.

      You save about $40 which is not that big of a savings but could be option for someone.

      I don’t see this any different than offer the $199 model and then making you pay high prices for the upgrades instead of just buying it with them attached at a lower cost.

      • MarcZero says:

        True. I was just putting up the “ideal” pricing based on what the article stated. I know not everyone buys their xbox live cards from Amazon. It’s true that this is just another pricing configuration that Microsoft is using to attract more sales of the hardware. It’s well known that video game hardware sales are pretty much a loss-leader. They just want to get the hardware in your hands so you will buy games where they really make the money.

        I think this might become a model for other mature systems in the future. Microsoft has been working with cable companies to make the 360 act more like a cable box. Imagine if MS works with cable companies to link the 360 to a cable account. I envision cable (or other service) providers teaming up with MS to subsidize and knock off the other $99 initial up-front cost. Again, is this a wise move for consumers? Probably not, but since when are consumers purely rational and wise creatures?

        • Southern says:

          Yeah, I tried to get mine hooked up with AT&T U-Verse, but apparently there were too many problems with it so they stopped the program..

          Which was fine by me, because they wanted me to pay a $99 hookup fee PLUS the $7/month receiver fee to use my own XBox.

          I’d have paid the $99, but I would have balked at the $7/month.

  7. sjb says:

    Its the services that make the most money for a company. In gaming consoles, most companies sell them at price close to or below their manufacturing costs. They intend to make the profit off of the other things you will buy to feed their little machine. Its their way of putting a hook into you and drain a bit of you money off of you.

    Game consoles – games, add-ons, service contracts, on-line services.
    Cell phones – service contracts, roaming fees, overage fees
    Banks – teller fees, deposit sees, usage fees, overdraft fees, we do not care fees…
    Cable – What ever fee we can figure out this month plus fees if we make a mistakes

  8. RecordStoreToughGuy_RidesTheWarpOfSpaceIntoTheWombOfNight says:

    I’d do this if I needed another Xbox, as I already use XBL for Netflix and junk. I wonder if it counts if you prepay for the year, or if you have to sign up for month by month.

    • Selunesmom says:

      If it’s month to month, it might even work out cheaper since there’s frequently a month for a dollar or 2 months for 2 dollars deal.

  9. mister_roboto says:

    Any chance of the 360 being replaced by a next gen x-box in the next 2 years?

    • BooBee says:

      If not next year I’d say the following year for sure (2014). I’d be really surprised otherwise.

      • Peffse says:

        Considering the support Xbox got when the 360 debuted, this is going to sting some people later.

        • Daggertrout says:

          I don’t see why. The 360 is pretty much what the PS2 was last gen. And I even think the PS2 is still getting new games. Granted, they’re not big budget titles, but they’re there.

          • Peffse says:

            But Microsoft is NOT Sony. When the 360 came out all development for Xbox shut down, all support from Microsoft was pulled and all units shelved as replacements for warranty purposes. Sony kept PS2 support well into 10 years, making dev consoles cheap even thought they weren’t making first party titles anymore and slashing unit prices to minimum.

            • Tmoney02 says:

              The original Xbox had some unique issues resulting from Microsoft jumping headfirst into the video Game Market and not properly developing its hardware/licensing. In Short they essentially took a bunch of off the shelf computer parts and threw them together with no thoughts to the long term, – end result being they had to drop the original xbox like a rock or continue paying huge fees.

              In short the original xbox does not at all contain a valid guide to how the transition from the 360 to the next xbox will happen.

              • Peffse says:

                Both the PS3 and 360 are sold at a loss to remain competitive with the cheaper Wii. If manufacturing costs of the Xbox were the sole reason software support, and thus the entire sytem, was dropped, then we can likely see the same thing happening.

    • gman863 says:

      The XBox 720 is predicted to hit store shelves in late 2013 before the holiday shopping season.

  10. GoldVRod says:

    Amazon often have specials on the 12 month gold card and I’ve bought it for as little as $29.99 for the full year. Sometimes you have to look around for the specials though (gold box, coupon codes etc).

    If you shop around on amazon right now you can get it for as low as $44.95 http://amzn.to/ISixsO (alright not much cheaper than the link in the article but hey – money is money) and that was a cursory search that look a couple of seconds.

    This pay-monthly ‘offer’ from MS seems a bit off in terms of value frankly.

    • jefeloco says:

      I haven’t paid more than $30 per year for live since my first year of service with the original xbox :) It’s not hard to do if you look around, especially on Black Friday, just buy two cards instead of one.

  11. JohnDeere says:

    i see the 12 month gold cards all the time on dealnews.com for $30 each.

  12. Extended-Warranty says:

    Personally, I would never do this.

    Some of you need to realize though that there is absolutely a market for this, no matter how many pennies you can save. There are more different types of shoppers than online bloggers who shop at Newegg and Amazon.

  13. JJFIII says:

    I bet many of these same people have service contracts on their cell phones. try buying nan IPhone that is not on contract and let me know what you pay. Most people prefer to have the money in hand rather than with a company. Over the course of two years, the savings from paying upfront is not huge. Based on quick math, it will be somewhere in the neighborhood of $1.50 to $5 more per month to use the $99 program.
    I am sure they are thinking this may be a way to bring on next generation gaming systems as well. Then the value becomes even greater because who wants to be stuck owning a Atari system that is useless.

  14. gafpromise says:

    Honestly…we just purchased a 360 and every time we turn around, Xbox is denying some action we want to do because we haven’t signed up for the Gold service. It’s really obnoxious. I think any Xbox owner has to figure that cost into the purchase price anyway because there are so many things you can’t do otherwise. PS3 offers us way more functionality without having to drop money on a membership.

  15. Jawaka says:

    Meh, I don’t blame Microsoft. I blame the people who sign up for this. A fool and his money are soon parted. Microsoft is just standing there ready to take it.

  16. gnubian says:

    a gold family account (1 master + 3 sub logins) is only $8.33/mo .. right now on newegg, you can get the 250GB kinect bundle for $350 .. This is targeting the rent-a-center crowd who can’t hold onto their money for long enough to buy a full system (which doesn’t require an xbox live account to use).

  17. Harry Greek says:

    SHUT UP AND TAKE MY MONEY!!

  18. Snip says:

    People who want to drop their cable might go for this. 14.99 a month plus the hardly prohibitive costs of Netflix, Hulu Plus, Epix and Vudu still come out better than most cable plans.

  19. do-it-myself says:

    Back in my day, if I wanted something bad enough, I SAVED UP for it. There are too many things we think are needs, but are actually WANTS. Video games is one of them. There are so many quality games out there these days that it’s foolish to pay such high prices. Normally this would be a great time to buy these appliances as they approach the end of their life cycle (this shit has been out since 2006!) and the discounts would be abound with a new system on the horizon, but they are even greedy during these times now.