Microsoft is trying something unique amongst video game c0nsoles, lowering the hardware entry gate and tacking on a $15 monthly fee for Xbox Live for two years to draw in buyers. Consider the subsidized cost similar to that of a cell phone service and a contract. In this case, users are cutting the bulk of the cost upfront by $100 (4GB units retail for $200, this one is $99), spending around $40 more than they would outright, and assuming the risk of a broken contract.
The deal is currently exclusive to the handful of Microsoft stores around the country, all 16 of them. Sega tried something similar with the Dreamcast, only in Sega’s plan, the console was free with a subscription to Sega Net. The hardware was also potentially entering its prime, while the 360 is entering its twilight phase.
What does this introduce? The possibility of higher end, more expensive hardware down the line. One can imagine a $600 game console cut down to $200 with monthly fees tacked on for a few years. Those with $600 are unphased, those that can’t afford it have another option, not unlike a Rent-a-Center scenario sans outrageous fees.