They were going to be the casual gamers' machine.
Microsoft considered the idea of providing the original Xbox console for free.

That's according to Oddworld creator Lorne Lanning, speaking in a new interview with

Before the launch of the original Xbox, while Microsoft was still attempting to nail down its plans for entering the console space, the company had an idea that its new gaming hardware should be provided without an upfront charge.

This was, Lanning recalled, planned as move to appeal towards "casual" gamers.
At the time, Xbox thought that the core market was going to be casual. They were going to be the casual gamers' machine," he explained.

"Now, that's why they approached us because they said 'we think you've got something that competes in that Mario space and we think Mario's the thing to kill... We see that space. We want that audience. We love Oddworld so why don't you get on this bandwagon? And we might give the box away."

"So now you're like, 'look, if you're going to give the box away, you're going to win. If you're going to win, we want to be on board'."

It's not known, but seems likely, that other payment models for the original Xbox would also have been available.

Providing hardware with no upfront charge (or a minimal one) is an idea that Microsoft hasn't forgotten. Popularised by the mobile phone industry, this method of providing regularly-updated technology is thought to have also been considered for Xbox One.

Back in 2012, Microsoft also offered a cut-price $99 (67) Xbox 360 and Kinect bundle subsidised by an additional $15 (10) monthly subscription fee.

The offer was limited to the US and described by the company as a "pilot experiment". 24 months of Xbox Live Gold membership were also included, effectively signing players up for a two-year contract. The offer quietly ended in 2014.