Microsoft is planning to launch a $99 Xbox console package with a monthly subscription as early as next week, according to our sources. The software giant will offer the 4GB console with a Kinect sensor at its range of Microsoft Stores in the US, subsidized with a monthly cost of $15. We're told that the two-year subscription will provide access to the Xbox Live Gold service and possibly some additional streaming content from cable providers or sports package providers. Customers who sign-up for the deal will also be covered under a two-year warranty.

via theverge.com

Game changing move. This is what Telco's do, subsidize the device/equipment and then have monthly subscription fees to use the service. In this case the service is XBOX Live Gold which allows you to access a host of services like Netflix, Youtube, Xfinity etc on your XBOX. I am sure Microsoft will roll-in few more services into to make it more attractive (like "Woodstock" music service coming soo to your nearest XBOX). This could also turn very similar to Amazon Prime since it is connected to Microsoft Stores (the retail outlet which sells Microsoft products).