Microsoft has announced a partnership with Telstra to sell Xbox consoles, bundled with services and accessories, through monthly payment plans in Australia following a successful pilot program in the US last year.

Microsoft has already moved away from relying solely on retail sales for its software business, launching all its own games and hosting hundreds of others on its subscription Game Pass service. The new monthly payment program, called Xbox All Access, is intended to remove further barriers between its gaming ecosystem and new customers.

Xbox All Access includes either flavour of Xbox One console as access to download and play hundreds of games via Game Pass Ultimate. Supplied

"Instead of buying Xbox, what if you just joined Xbox? And by joining Xbox you got all the things you need? That was really the notion and the spearhead behind this idea," says Jeff Gattis, Microsoft's GM of platform and devices marketing.

"It really lowers the barrier to entry for people who are on the fence about buying a $300, $400, $500 console ... it has everything they need to have a great gaming experience for a low monthly price with no money up front".

The program — which is only available to Telstra post-paid customers and will be added directly to Telstra customers' bills — includes a console, a controller and a Game Pass Ultimate subscription. This means players can pick up a console at a Telstra store, or order it online, and have instant access to hundreds of games on Xbox as well as PC, and can play online at no extra cost.

Customers can choose an Xbox One S for $27 per month, or a 4K-capable Xbox One X for $38 per month, both over 24 months. That's a total cost of $648 or $912 respectively, which in each case is a saving of around $100 versus buying a console at retail and keeping a Game Pass Ultimate subscription for 24 months.

At the end of the contract term customers own the hardware, just like with a mobile phone, and they can cancel any time and just pay for the remaining hardware cost. Game Pass is simply cancelled and doesn't need to be paid out.

Gattis says that while the program is not aimed at replacing "the physical retail experience", he expects All Access to expand as consumers become more comfortable paying for items as part of a service rather than with upfront fees.

"We look at Xbox All Access much like, for lack of a better example, an Amazon Prime. Where we have this relationship and this monthly payment but we want to continue to add more value to it as we go," he says.

"In the case of Telstra for instance they will be offering hardware accessories, like an additional controller, and you can add that on to your Xbox all Access subscription for, say, a couple more dollars a month."

Microsoft will be launching a new generation of Xbox consoles before the end of next year, and Telstra says it will provide options for All Access customers that want to upgrade.

Telstra's 5G network would also make it a likely partner for the Australian launch of Microsoft's xCloud game streaming service also expected next year. Gattis notes xCloud isn't a commercial endeavour yet, but says it's "not unrealistic" to think about it becoming part of the Xbox All Access billing infrastructure.

All Access is launching in the US and the UK as well, though in those countries the partners are retailers rather than telcos. Gattis says over the coming years the program will spread to more countries, and more retailers within each country, but for now Telstra offers some particular benefits.

"[During last year's trial] our customer experience wasn't great, and that's probably putting it lightly. It was actually fairly poor. It took a long time to go through credit approvals," he says.

"Telstra already has that billing relationship with the customer, so it does reduce a lot of friction."