Microsoft's Larry "Major Nelson" Hryb has announced that the $99 Xbox 360, which subsidizes the price through a two-year contract, is now moving outside of Microsoft's scattered official stores and into GameStop and Best Buy. The move marks another step in the Xbox 360's push to a wider range of consumers, ahead of the Durango Xbox's likely 2013 announcement.

The $99 Xbox 360 program offers users a 4GB Xbox 360 with Kinect and a two-year Xbox Live Gold subscription, which allows users to play online and download movies and go into party chat among other features. The catch is that users have to pay $14.99 per month for Xbox Live Gold, which includes an expensive early cancellation fee.

For users who aren't fussed about the next-gen Xbox console, then the worry of being stuck in a two-year contract is probably non existent. The hardcore audience will likely want to get the console as close to day one as possible, though the lack of availablity during the Xbox 360's 2005 launch means inflated prices for the console could appear on eBay once again.

Major Nelson said on the blog post that it's a "new retail model for the Xbox 360, but ... this is a pilot for the program."

Looking at whether paying for a two-year subscription or rolling in the program is cheaper, the Xbox 360 4GB console on Amazon costs $199.99 while two 12-month Xbox Live Gold subscriptions costs $49.32 each - $298.63 in total. The Xbox 360 4GB with Kinect bundle costs $299, so with two 12-month Xbox Live Gold subscriptions, it would cost $397.64 in total. In comparison, the $99 program costs $458.76 ($99 for Xbox 360/Kinect bundle and $359.76 for 24 months Xbox Live Gold subscription @$14.99 per month). So, whichever way you look at it, there's clear value in paying upfront.

Another thing to note: 4GB consoles won't last long long, so a bigger hard drive will be needed. The official Xbox 360 250GB hard drive costs $84.99 while the 320GB version costs $121.34. Of course, users can also connect third-party drives externally to the console.

Or if a smaller form factor isn't essential, the Xbox 360 Elite is available for just $129.99. Kinect isn't included, and users with wireless connections will have to buy a Wireless Adapter for $43.82 at RRP which supports A/B/G/N wireless networks. The Xbox 360 S, the console in the program, has built-in wireless.