It looks like Microsoft's pretty much confirmed that the next generation Xbox 720 is just round the corner, and it's cottoned onto a cunning plan to earn a few bob from the aging Xbox 360 in the process. It's slashed the price of the Xbox 360 to just £60-odd in the US, but only if you sign up for two-years of Xbox Live.
We heard rumours last week that Microsoft's next gen console had already entered manufacturing. Of course that could just mean developer kits are being made, but it definitely hints that Microsoft isn't all that far away from a release, possibly by end of this year, possibly at beginning of next.
Now Microsoft has essentially set up a phone network-style subsidy supported by an Xbox Live Subscription in the US, where you can buy an Xbox 360 from a Microsoft store for just $99 or about £60-odd with a two-year, $15 (about 10-quid) a month subscription to XBL Gold. It's a great way to tie people into a contract, and therefore continue to generate revenue from them, even when the console is about to be replaced. It also makes the old-but-now-cheap console look more attractive on the face of it, although the whole package will run you about £300 over the two years, which isn't exactly a bargain.
I'm not sure I'd be swayed into a two-year Xbox contract just to grab a 360, but then we're not being given that option in the UK just yet. It certain screams to me that Microsoft is gearing up to replace the 360 pretty soon though, even if the current rumours say it's not going to make an appearance next month at E3. [Kotaku, IGN]