The deal is for a limited number of users for a short period of time, but if there is enough interest, the company may expand the offer again, according to the Wall Street Journal.
Currently, the offer is exclusively available at 17 Microsoft stores. The $99 offer combines an Xbox 360 and Kinect motion sensor with a two-year service contract.
The company announced the plan last month as a cheaper way for consumers to buy the console. To get the $200 savings, however, they'll need to sign up for a two-year Xbox Live Gold membership, costing $14.99 per month.
Access to the Xbox Live network lets gamers play games with one another, watch streaming videos, and access Netflix, among things.
The Xbox and Kinect package retails for $299. The Xbox Live Gold online subscription regularly costs $60 per year.
Update, 11:24 a.m. PT: Updated with more info.