Cheap Xbox and Kinect launches with phone-style contract

Fancy a cheap Xbox? Microsoft is offering a console and Kinect for just $100 -- but the catch is a two-year contract. Can this phone contract-style deal work for gamers?

The 4GB Xbox and Kinect costs about £60, with Xbox Live Gold membership costing just under £10 per month.

The deal is only available in the US, and only from a Microsoft Store -- you know, an actual shop. You have to print a voucher and take it to one of the 17 Microsoft Stores in the US, so if you're nowhere near those stores then you're out of luck.

Is it worth it? Not really. By spreading the cost over two years you don't have to pay out such a big lump sum at the start -- but you have to be so bad at saving up that your money burns a hole in your pocket before you get anywhere near the full price of an Xbox for it to be remotely worthwhile.

The total cost over the two year contract is much greater than if you just bite the bullet and pay out for the Xbox -- especially as you're locked into a lengthy two-year contract, complete with cancellation fee if you decide to bail out early.

Buying a bargain-priced gadget subsidised by an extra amount on your ongoing bill is the accepted way of owning a phone in this country, but it's less common in the US, or for gadgets other than phones. Generally you will pay more if you go for a contract than if you buy a phone full price and get a cheap deal separately, but the phone market is so competitive that there are bargains to be had even on contracts.

One question that springs immediately to mind though is whether you want a two-year contract when the next Xbox is around the corner. The hotly-tipped Xbox 720 hasn't been officially confirmed, but is so close to arriving reports suggest it's already in production. Microsoft's plan is to shift the last stock of current Xboxes at cheap prices but still make money off the sale from the lengthy contracts -- which tie you into the world of Xbox so you'll have to buy a 720 when it comes out too.

Would you buy a cheap Xbox with a two-year contract? Are you happy with the cost of your phone, and does the phone contract model work with gaming? Tell me your thoughts in the comments or on our Facebook page.