Last week, word leaked out that Microsoft planned to introduce a $99 version of the 4GB Xbox 360 with Kinect sensor for those buyers who sign up for a $15 per month subscription to the Xbox Live Gold service.

Well, the deal is now official, advertised at the Microsoft Store.

On the surface, it might seem pretty sweet. After all, the 4GB Xbox now sells for $299, and annual Xbox Live Gold membership is $60.  Total cost of $420.

With the new pricing arrangement, customers can get a good deal initially on the hardware. But the subscription fees actually are much higher, meaning that over the two-year period the total cost of the device and subscriptions is about $460.

The Verge, which first broke the news last week, reports today that the “low entrance fee will help the company continue to dominate the living room.” The promotion is only available to those who bring the coupon above into a Microsoft retail store.

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     Congratulations to Microsoft on having the bravery to try two pricing models for their flagship product!

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