Video game analyst Michael Pacther says that we're more than likely to see the next Xbox come in at a cool $99 price point - with a catch.
Pachter said that he expects that Microsoft will join forces with a cable TV partner, and that to get the $99 device you'll need to sign a contract with said cable partner.
This is the same business model that mobile retailers use when selling smartphones - the list price on the most powerful Android phone might be more than $700, but Verizon is willing to sell it to you for $200 if you promise to pay for service for two years.
The rationale, of course, is that over those two years, Verizon will more than make up for the $500 it lost on that smartphone sale.
For something like an Xbox, though, there are millions of people who live perfectly content lives without having an Xbox Live service subscription, so this strategy is a bit different.
" The Xbox 720, this is my prediction, is going to be your television as well. You’ll be able to tune into television through it. You won’t need a ‘smart TV’ when you’ve got an Xbox 720, it will be your television and your internet. It’s going to be open architecture and I think it’s real trick will be that one Xbox will be able to display television to as many screens as you have in your possession," said Pachter.
In the world of American consumerism, that sub-$100 price point is golden, and if Microsoft can actually get customers to leave a store with a new Xbox by only paying $99 plus tax, it would no doubt result in an explosion of user growth.
With that explosion, though, Microsoft would be ill advised to make any sort of announcements about the console's successor. The last thing people who sign up for a two-year contract want to hear is that the thing they just bought is about to become irrelevant.