Microsoft confirms $99 Xbox 360 deal

Microsoft has officially announced a new Xbox 360 deal which offers a 4GB console with Kinect for an initial $99, subsidised by a two-year subscription costing $14.99 a month.

The deal, first reported last week, comes with a two-year Xbox Live membership and will cost consumers a total of $458.76. A 4GB Xbox 360 with Kinect and two years of Xbox Live currently costs $380.18 on Amazon US.

Analysts were divided on the merits of the offer, which is only available at official Microsoft stores in the US. Speaking to, David Cole of DFC Intelligence said: "As a consumer, the prices being talked about look like a sucker deal to me."

He admitted, however, that it was a bold move from Microsoft and "an interesting marketing play… I think you will see more creative marketing packages coming in the future from all manufacturers." Billy Pidgeon of M2 Research was more succinct, saying: "Great for Microsoft, not so great for consumers."

The deal comes weeks before E3, where in the absence of any new hardware announcements Microsoft is widely expected to announce a price cut for Xbox 360 to wring one more year of sales out of its console, which launched in 2005.