In the smartphone biz, subsidies are king.
One of Apple's
No subsidized contract would be complete without an early termination fee, which is $250 in this case. This fee declines each month, just like in the smartphone industry.
I'll save you the trouble of grabbing your calculator; the total cost over the life of the contract is $459. Unsurprisingly, you end up spending more with this option than if you were to buy the pieces separately. An Xbox and Kinect bundle normally goes for $300, and you could purchase 12 months of Xbox Live Gold for $60 (before various discounts that are out there for a subscription). Of course, Mr. Softy is hoping you'll load up on other content once you're inside its digital storefront.
Microsoft is keeping mum on the next iteration of its gaming console, which is casually being called the Xbox 720, although the company has said it won't be out this year. It would be rather unkind to make this offer only to release the new model in 2013, so this might be a hint that 2014 is the year for gamers to look forward to. Meanwhile, Sony is "confident" that it can beat Microsoft to the punch with the PlayStation 4.
The Xbox deal lowers the upfront cost, just like in the smartphone world, but beyond that it's really not much of a steal.
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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. holdings and a short bio to see his holdings and a short bio. The Motley Fool owns shares of Microsoft, Sony, and Apple and has created a bear call spread position in Sony. Motley Fool newsletter services have recommended buying shares of Apple and Microsoft and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.