questionsis anyone going to fall for the xbox360 4 gb…

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Yes, people will fall for it because people, on average, are idiots who don't do enough math. You actually took the time to look at the whole picture and calculate costs for things, while most people are gonna look at it and say "Ooooh! It's less than $100, let's get it now!!!" It's not smart, and it's more expensive, but you can't always explain that one deal is better than the other because it saves money in the long run and have them see the error of their ways.

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The same people who shop at rent-to-owns and think they're saving money. I know plenty of them. Can't scrap together $50 for anything, but always have money for cigs and beer.

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@gopvifootball: If you take the $99 xbox deal you agree to pay the $15/month fee whether you use the Live service or not.

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@minxa1: The same people who 'get a free phone'.
When I had Straight Talk I keep getting bombarded with 'my phone was free'. I keep explaining that over the 2 year contract that he signed I paid less.
Long story shortened: Straight Talk cheated my by over charging my credit card, would not refund my money, I left and can not recommend them.

To the OP thanks for the warning. $99 360!, oh but with subscription only : (

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So what stops you from buying one of these xboxes using a prepaid card of some sort and then just canceling the card after the first month?

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Are you saying that in order to use it at all you have to pay a monthly fee? Or do you mean in order to play games online?

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@rockytrh: I wonder if they are building in some way to be able to deactivate the device. Because unlike a cell phone, they can shut off your live and the box currently still works. Maybe putting some dependency on communicating with Live for you to be able to play games?

I've never bought a cell phone and then not paid the bill, but I wonder how it works on those if you used a prepaid?

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@rockytrh: Some type of automated billing, and early cancellation penalties, similar to cell phone plans.

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@rockytrh: From the terms and conditions: "This Offer is subject to customer eligibility check, including credit approval."

If they can check your credit, they can also trash it if you stop paying. My guess is a prepaid card won't work.

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It's not quite that straightforward:
1) The warranty is for the full two years, rather than the standard one year. Normally, extended warranties are almost worthless, but given the failure rate of these consoles, even with all the fixes they've done, it's worth something.

2) Let's assume that the person who buys this is looking for a low cost of entry: otherwise, they'd buy it outright. That means they're not going to buy a year sub, or probably even a 3 month sub. The month-to-month sub is $10 bucks a month. So, of the $15 a month they're paying, $10 goes to their Live account, and $5 goes to the cost of the console.

3) The 4 gig console w/ kinect retails for $299. They pay $99 upfront. That means they're borrowing $200, and paying it back over the course of 24 months at 5$ a month, for a total of $120. They're coming out ahead by $80 bucks!

4) If M$ reports to CC agencies, it could actually help people build their credit!

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My thoughts exactly when I recently found out about this. I bet the only "services" being added are what was mentioned at E3. Xbox Music, IE Explorer, etc. As if Pandora, Netflix, and the browser already in my TV wasn't enough. I'll take the $5 a month rate, thanks.

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Also: I can't find anyone selling a year sub for $33 any more. That was a short term promotion, as far as I can tell. The cheapest I can find it is $47.50 a year, but again, the people buying year subs are not who this is marketed to.

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@captainsuperdawg: Most of the deals now offer 50% off your Gold Membership for 3 month... , so it's actually very close, but I believe if you factor in the extended time you're able to pay it seems worth it. I bought mine outright, but I can see how this makes sense.