Yesterday, we published a story that included a mention of Microsoft’s rumored subscription-based Xbox 360. At the time, Redmond wasn’t ready to share any details, but it seems that the offer has gone live. Xbox Spokesman Larry “Major Nelson” Hryb tweeted this:

 

Let me be blunt. This is not a good deal unless you absolutely need to spread your payments out.

If you go down this road, you’ll be committing to the following: $99 + $14.99*24 = $458.76

If you purchase a 4GB console with Kinect and two years of Xbox Live Gold from Amazon right now? $286.95 for the console plus $48.41 each for a 12-month Xbox Live Gold card. Grand total: $383.77. I’ve got an even better idea for you, though. Why not get yourself the Star Wars Limited Edition Xbox with Kinect. Amazon price? $399.99 and it comes with a 320 GB HDD (You’re going to want one of those, by the way). Throw in two years of Xbox Live (if you really must buy that much in advance) and you’re only at $495.82.

Here’s the thing that’s so confounding about this “deal,” though. I have no idea who would want it.

Gamers are going to be smart enough (even adopting this late in the life cycle) to know that DLC makes having a hard drive pretty important. They also will likely have done their research to know how much Xbox Live will cost them, and no one is likely to choose the month to month option. Even at the retail price of $60, you’re getting a full year for the cost of four months at the pay-as-you-go rate.

As for gift-givers (parents, grandparents, wealthy uncles, etc.), they aren’t going to understand why Xbox Live is important. No matter how pushy a salesperson will get, I can’t see a relative saddling themselves or the gift recipient with that recurring $15 charge for two years. If they ask the right questions, they’ll probably just make the smarter decision and purchase one of the $299 bundles and a single year of Xbox Live. Actually, scratch that, they’ll find out that you can purchase a Kinect separately later and won’t likely spring for the bundle. They’ll opt for a $199 4GB model or put the money toward one with a hard drive.

Microsoft is making a big mistake here. They’ve introduced another option into an already crowded marketplace. People become overwhelmed when there are too many choices. Analysis paralysis sets in and, rather than make a purchase, customers leave empty handed. Maybe that’s why Microsoft is trying this out in their stores first (with coupon):

 

 

Click to Enlarge

 

They’ll have the chance to try out different sales pitches, hear concerns direct from consumers and make adjustments. Ultimately, I don’t see this working out for them. It’s too muddled, and it’s not clear who the target market is. They either need to sweeten the pot or dump the plan all together. As always, don’t be a sucker. If a deal sounds too good to be true, it probably is. Do your research, know the costs and make a smart decision.

 

Michael Futter is the Managing Editor of @RipTen. You can follow him on Twitter at @mmmfutter.