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 GI.biz, 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.

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