Just as we reported last week, Microsoft is selling the a 4GB Xbox 360 console with a Kinect for $99 with a two-year Xbox Live Gold contract for $14.99 per month. Unfortunately, you'll have to live near a Microsoft Store to cash in on this deal; you'll need to bring in the coupon (or have the store associate enter a specific offer code) and sign up for two years of service. Overall, this bundle will cost $458.76 over the course of two years (before taxes), as compared to a $299 bundle bought outright, plus two years at $59.99 per year for Xbox Live Gold, which can often be found at a discount — so while you'll save some money off the bat by signing that contract, you'll actually spend a little more over the course of the two years.

There's a few more details in the fine print: customers who pass the credit check will have 30 days to return their console for a full refund, though the first month's subscription fee is nonrefundable. That pesky early termination fee starts at $250 in months one through three, drops to $240 in month four, and drops by $12 every month following. While it'll be up to the individual to decide if this deal makes sense, Microsoft is likely hoping that the low entrance fee will help the company continue to dominate the living room.

Update: A Microsoft spokesperson sent us the following statement which clarifies that this deal is part of a "pilot program" to "test new products and offers to understand how best to serve our customers." The full statement is below.

On May 7, we launched a pilot program at Microsoft Stores in the United States to test a new pricing model for the Xbox 360. Specifically, the 16 Microsoft Stores in the U.S. will sell the Xbox 360 4GB console with Kinect for $99 with a two-year Xbox LIVE Gold commitment of $14.99 per month. The $99 Xbox 360 4GB console with Kinect allows customers to explore the full entertainment offerings available through the Xbox platform. The Xbox LIVE Gold subscription is a great way to enjoy the best multiplayer gaming network, as well as hit movies, TV shows, sports, music, and more. This pilot program aligns with our ongoing commitment to test new products and offers to understand how to best serve our customers.



