$99 Xbox Confirmed: What You Really Need To Know About Microsoft's Offer

08.05.2012
Microsoft Monday confirmed rumors of an $99 Xbox, announcing a deal that pairs an Xbox 360 4GB, a Kinect, and two years of the Xbox Live Gold service for $15 per month--after $99 down. Only Microsoft's own retail stores carry the offer, so don't look for it at other retail outlets like Target or Walmart.

The company says it wants to "test out " for the Xbox, but will not confirm whether there are plans to offer the $99 console elsewhere in the future. Not every Microsoft Store will be able to sell the subscription plan either: It will be available in 16 of the 21 current Microsoft Stores (Microsoft did not provide a list of the 16).

Does this sound a bit too good to be true? It is, and there's some fine print you need to know about. That Xbox Live subscription is mandatory and, just like your contract cell phone, you will pay an early termination fee of up to $250 if you need to get out early. The total cost of the subscription over two years is $360, making the real cost of the console under this plan $459.

Compare this to purchasing everything up front. Most retailers sell the Xbox 360 4GB/Kindle Bundle for $299, although Walmart sells a similar package online for $229. If you add in the , that's another $120 (billed at $5 per month). If you go with Walmart's deal, you'd spend $110 less over two years. Definitely not chump change.

Better yet? Buy the console and you get $15 off per year of Xbox Live Gold. There, the console is $299 but the total you'll spend is around $389, $70 cheaper than the contract plan. But there's an even bigger reason why you will want to stay away.