Microsoft Set to Launch $99 Xbox 360 Bundle

Microsoft is set to release Xbox 360 featuring a 4GB console and a Kinect sensor which will be priced at just $99 (£61) according to The Verge.

The 4GB equipped console and a Kinect sensor is expected to be available in Microsoft Stores in the US. Its monthly payment plan will cost $15 (£9) a month for a two-year subscription which will offer Xbox Live Gold service as well as access to some extra streaming content from cable or sports package providers.

The user will need to sign up the deal which will be enclosed under a warranty of full two years.

Users will have to pay an early termination fee if they wish to break the contract. "Owners will end up paying more in the long run ($459 (£284) with a two-year commitment vs $299 (£185) for a similar bundle without a subscription), though a deal like this could drive significantly more sales," claims CNN Money.

The move could be an effort from console manufacturers to attract customers who might be wary about shelling out plenty of money on consoles. It would bring a major change in the console market.

"Rather than offering hardware as a loss-leader for the eventual sale of games and accessories, Microsoft would essentially be subsidising Xbox 360 sales to attract the potentially much more lucrative flow of monthly video subscription revenue," claims CNN.

It is reported that the plan is due to be announced officially by the company and will be available as early as next week. It could be a great opportunity for enthusiasts who do not own an Xbox and wonder if the Kinect could be really interesting. The Xbox is expected to access the services to stream content from Netflix, Hulu and Vudu.

According to IGN, analysts believe that Microsoft's low-priced subscription could be a Trojan Horse for its Xbox 720 strategy.

Microsoft's Strategy

The new plan appears to be a great move of Microsoft which will make the Xbox 360 not only a player in the game space, but it could compete with gadgets like Apple TV, Roku and PlayStation 3.

The company could be seeking to increase sales of its consoles over the summer period. Probably, budget-friendly customers would opt for $99 (£61) Xbox 360.

Moreover, "By sticking players online automatically, it's going to increase the likelihood that players will buy flair in games that they already play online, like Call of Duty," claims Business Insider. The players will be able to buy games, music and movies on Xbox Live. It is reported that the company will take a share of money for the digital download which will be made by the customers.

The company has not made any official announcements about the product.