Yesterday, Microsoft confirmed the rumors that they will be selling a 4GB Xbox 360 console bundled with Kinect and a two-year contract that includes Xbox Live Gold, requiring an initial payment of $99 followed by monthly payments of $14.99. The deal is only available within Microsoft Stores and requires customers to bring in a coupon or have a store associate enter a specific offer code to sign up for the contract.
Purchasing the same console with Kinect and two years of Gold membership would cost $419.97, compared to the aforementioned setup running a total cost of $458.76.
In the fine print, it is important to note the early termination fee, starting at $250 in the first three months which drops to $240 in month four before dropping by $12 each subsequent month after that. The console can also be returned for a full refund up to thirty days after purchase if customers have passed the credit check, although the first month subscription fee is not included in the refund.
Analysis: I don’t really see the usefulness of this deal or how it could really appeal to a potential customer. Obviously, Microsoft is hoping that the low entry price will help persuade late adopters who are strapped for cash at the current moment, and I suppose there are a few who may find this deal helpful. However, it’s essentially the same as a cell phone contract, and I’m fairly certain almost everybody hates them.
The combination of the end price being higher than what purchasing all the products outright would cost and the early cancellation fees, which I feel are incredibly high, simply make this deal unattractive to me. But having another option to get a current generation console into a family’s living room certainly doesn’t hurt at all.