Microsoft expands Xbox 360 payment plans

Microsoft is expanding its lineup of Xbox 360 payment plan deals in time for the holidays. The program now includes three package deals available for a reduced up-front purchase in the U.S., along with a contract for two years of Xbox Live at $15 a month. We can expect to see similar mobile-phone-style options for new Microsoft hardware in the future.

Microsoft's Larry Hryb laid out the program on his Major Nelson blog: Shoppers can nab a 250GB Xbox 360 or a 4GB Xbox 360 with Kinect for $100, or a 250GB Xbox 360 with Kinect for $150. All the plans come with a contractual obligation for two years of Xbox Live membership, adding up to $360 by the end of the agreement.

Value math time: a 250GB Xbox 360 by itself goes for $250 on Microsoft's online storefront right now. Two years of Xbox Live Gold at the annual rate would cost $120, bringing the price of an equivalent package to $370, versus $460 for the contract model, or $470 versus $510 with a Kinect.

Still, they're both better deals for folks who prefer payment plans than the 4GB alone, which would cost $460 with contract as opposed to $320 without (assuming Microsoft doesn't put the 4GB model on sale). The deals will pop up at GameStop, Toys R Us, Best Buy, Walmart, and Microsoft stores through the end of October into November.

Matt Barlow, general manager for marketing in Microsoft's interactive entertainment unit, told the Wall Street Journal that the company will push subscription contracts for the foreseeable future, and that "this type of program is pivotal to our business."