Update: A Microsoft spokesperson responded to inquiries about the $99 Xbox with the wholly unsurprising statement: “We haven’t made any announcements and we don’t comment on rumor or speculation.”
The Xbox 360 is showing its age. At 7-years-old, the once beefy machine is starting to look downright archaic compared to advanced PCs. Why should Microsoft care though, when people are still paying $300 for a 250GB console? The Xbox 360 sells, and for an impressively high-price for so old a machine, but it looks like the machine may finally hit the $99 price point common of consoles in their golden years. The $99 Xbox may be a very different machine though if reports are accurate.
The Verge reported on Wednesday that Microsoft will release a $99 package including a 4GB Xbox 360 and a Kinect sensor next week, but the low price is subsidized by a $15 per month subscription fee. The bundle will be sold exclusively through Microsoft Stores. Customers will have to sign up for extended subscription plans as well. A two-year plan will include unspecified streaming media services as well as an Xbox Live Gold membership for online gaming.
This rumor is supported by another that popped up in March regarding a new device known as Xbox Lite. Microsoft rumor-monger MS Nerd said on Web community Reddit that the company was preparing to release a small, disc drive-less version of the Xbox 360 that focused on streaming media and downloadable games. It will also support the newer version of Kinect that is currently only compatible with Windows PCs. Word was that Microsoft planned to announce this device at E3 rather than debuting a brand new high-end gaming console.
Microsoft is also said to be preparing a slew of new streaming media services for the Xbox 360. Among them is Woodstock, a replacement for the declining Zune Marketplace similar to streaming music services like Spotify. Woodstock is also said to be debuting at this year’s E3.
It’s an interesting gamble to take with aging technology. It took Sony 9 years to drop the PlayStation 2’s price to $99, and when it did, the system enjoyed strong sales for another twelve months before dying off in the U.S., Europe, and Japan. The Xbox 360 is in a similar position with consumers that the PlayStation 2 was after seven years, with steady sales and game releases. A subscription-based sales model like this is untested in the market though, which is likely why it’s only planned for Microsoft’s retail outlets. If nothing else, Microsoft can afford to experiment. The Xbox 360 is healthy even though the video game retail market is soft. Why not try to milk a little more out of this cow before putting it out to pasture?