Buying a home video game console may soon become a lot more like buying a cell phone, according to a new report suggesting Microsoft is planning to offer a subsidized, $99 bundle including a 4GB Xbox 360 and Kinect sensor to anyone who commits to two years of a new, $15 monthly online service package.
According to a report from The Verge, which cites unnamed sources, the new subsidized bundle will be available "as early as next week" in Microsoft's retail stores. The $15 monthly subscription would reportedly include all the online gameplay features of a current Xbox Live Gold subscription, alongside unspecified additional content from cable or live sports video providers.
Such a new content plan could help position the Xbox much more directly as a full-service living room entertainment center, rather than primarily as a video game system. That's a transition Microsoft has been signalling for years with its slow accumulation of online entertainment apps, and one that seems somewhat natural given that entertainment apps are already more popular than online gaming on the Xbox 360. The report also fits with a recent leak that suggested Microsoft would be rolling out a "strategy to further monetize the Xbox subscriber base" in time for the holiday season.
The total two-year cost for the subsidized bundle as described comes in at $459, compared to the $418 Microsoft currently charges for a 4GB Xbox 360 and Kinect bundle ($299) and two years of Xbox Live Gold ($59/year). Whether that extra cost would be worthwhile depends largely on the precise features Microsoft offers for the new monthly subscribers, and how comfortable consumers are with being essentially locked to their game system for a two-year period (Microsoft would reportedly mimic cell phone providers in charging an early termination fee to those who decide to drop out before the term is up).
Economical or not, such a move would represent a major change in the way game consoles are presented to consumers. Rather than offering hardware as a loss-leader for the eventual sale of games and accessories, Microsoft would essentially be subsidizing Xbox 360 sales to attract the potentially much more lucrative flow of monthly video subscription revenue. Given the relative sizes of the current markets for console games versus video services, that might not be such a crazy idea.