According to The Verge, a New York-based technology news website, Microsoft are set to announce a US$99 Xbox 360 next week. To buy one at that price, however, users will need to sign up for a two year contract (much like the way people purchase cell phones today) at US$15 per month, which will also include access to Xbox Live and an extended warranty to cover the contract period.
The console, which includes a 4GB storage unit and a Kinect, will ultimately cost users of the plan US$459, compared to $429 if purchased via traditional means.
Microsoft responded to Joystiq in the usual way, stating "We haven't made any announcements and we don't comment on rumor or speculation."
According to The Verge, the deal is set to be announced next week; if it's true, we'll likely find out more about it then - including whether or not the deal (or something similar) will be made available to Kiwis.