I read some where that microsoft is going to lower the price to 99 but your going to have a xbox live contract for 2 years and if you want to cancel theres a fee. I also believe it was going to be 15 bucks a month for live but im not sure about that, either way i think it comes up to about the same price if you were to buy a xbox for 200 and then bought live for 2 years. So not sure why do that, probably just looks better for marketing.
Some guy mentioned that they are thinking about including netflix, and some other crap with the 2 year live membership, not sure if thats true.
The total two-year cost for the subsidized bundle as described comes in at $459, compared to the $418 Microsoft currently charges for a 4GB Xbox 360 and Kinect bundle ($299) and two years of Xbox Live Gold ($59/year). Whether that extra cost would be worthwhile depends largely on the precise features Microsoft offers for the new monthly subscribers, and how comfortable consumers are with being essentially locked to their game system for a two-year period (Microsoft would reportedly mimic cell phone providers in charging an early termination fee to those who decide to drop out before the term is up.
My guess is this is in preperation for the new xbox 720. Console makers normally sell their consoles for a loss for the first year or two, making up the difference on game sales. I have a feeling the 720 will not be sold at a loss, instead subsidizing it's cost via a 2 year xbox live plan.