$99 subscription-based Xbox 360 available through promotion

Microsoft today confirmed and launched a low-cost subscription subsidized Xbox 360 bundle.

The bundle includes an Xbox 360 console with 4GB hard drive, a Kinect sensor and an Xbox Live Gold subscription for the duration of the two-year contract.

As was previously reported, the bundle costs $99, along with a $15 monthly fee for the duration of the two-year contract. However, it is currently only available as a special promotion through Microsoft Stores in the US. Users must print out a coupon and redeem it at a Microsoft Store location to take advantage of the deal.

An early termination fee of $250 applies to the first three months, which drops to $240 in the contract's fourth month. The termination fee then drops $12 each month after the fourth.

Bought separately, a 4GB Xbox 360 and Kinect bundle with a two-year Xbox Live Gold subscription would cost $420 up front, less than the cost of the rumoured bundle totalling $459 over the course of two years.

It was originally rumoured that the subscription-based bundle could include access to paid entertainment apps on Xbox Live, though no such offer is a part of the bundle that Microsoft confirmed today.

Analysts suggest that the promotion could be a pilot programme that could spread if successful.

Freelance analyst Peter Skerritt told Digital Spy: "I do believe that Microsoft has a purpose in rolling out their subsidized Xbox 360 plan in a limited scope through its own Microsoft store chain, because it can help to gauge interest in the programme before deciding how to proceed.

"If the programme is received well enough, I believe there's a chance that select retailers could be in line to pick up the programme at a later time.

"Also, the pilot programme can help Microsoft to gauge interest in possible subsidy arrangements for its next-gen platform."

Rumours suggest that the next Xbox is already under production, though Microsoft has previously denied reports that it will unveil the console at this year's E3.

Microsoft is also reportedly planning to launch its own Spotify rival music service Woodstock, which is said to be officially announced at E3 2012 in June.