Here’s How Microsoft Will Squash Xbox Competitors

Microsoft Corp. (NASDAQ:MSFT) may be getting ready to offer its popular Xbox system at bargain basement prices, pushing them way ahead of gaming and entertainment competitors.

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As early as next week, the company could unveil a $99 Xbox 360 package, according to reports from The Verge. The package would include a 4 gigabyte version of the console and a Kinect motion sensor controller, which retails independently for $149. The package would require customers to sign up for a 2-year commitment with Xbox Live Gold for $15 per month.

In the long run, customers will pay more for the $99 bundle, $456 for 2-years compared with a one-time $299 price tag for the same bundle without a subscription. The price drop could potentially increase revenues, which were down 48 percent during the third quarter of 2012 compared with the same quarter of 2011, and make the system more affordable for the console’s relatively young demographic, especially those who would be subscribing to the Gold service anyway.

In addition to a (potentially) lowered price point, Xbox offers a wider range of media options than many competitors including Apple Inc. (NASDAQ:AAPL) and Roku, and Sony Corp. (NYSE:SNE) and Nintendo. Xbox customers have access to streaming Netflix (NASDAQ:NFLX) content, as well as apps for Comcast’s (NASDAQ:CMCSA) Xfinity and Time Warner’s (NYSE:TWX) HBO GO.

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