The Xbox One S is getting a cheaper sibling.
On Tuesday Microsoft announced that it will be launching a new version of its Xbox One S system on May 7 that ditches the Blu-ray disc drive in favor of a cheaper $249.99 price.
Beyond the removal of the drive, the new One S All-Digital Edition is nearly identical in both size and performance to earlier Xbox One S consoles. It comes with a 1 TB hard drive for storing games and can still stream videos in 4K HDR.
The white design is the same as the one on the current One S, with the only real difference externally being that the slot for discs now is solid plastic.
Changing the box to a smaller form factor would've led to Microsoft having to spend more on development, making it more difficult to reach this lower price point.
"What we decided was that we were better served to get this to market and offer the value to our customers versus take on a bunch of additional development effort and cost that we might not be able to pass on to customers," Jeff Gattis, general manager of platform and devices marketing at Microsoft, tells USA TODAY.
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Microsoft is hoping the new console will allow it to better tap into younger gamers who didn't grow up with physical media. The console comes bundled with download codes for three games out of the box, "Forza Horizon 3," "Minecraft" and "Sea of Thieves."
The Xbox maker is also pushing its Game Pass subscription service as a compliment to the new system, offering those who purchase this Xbox the ability to get a three-month Game Pass trial for $1.
Game Pass, Microsoft's subscription games service for the Xbox, offers subscribers access to over 100 games – including the "Halo" and "Gears of War" series, "Sunset Overdrive" and more – for $9.99 per month.
Even with the new system, the disc-capable Xbox One S will still be available, as will the more powerful Xbox One X which can play games in 4K HDR and currently can be found starting at $399.
The regular One S is currently offered for between $229.99 and $249.99 as part of bundles at outlets like Monoprice, Best Buy and even the Microsoft Store, and during the holiday shopping season often hovered closer to $200 than its official $299.99 retail price.
While Microsoft wouldn't go so far as to announce how low the One S All-Digital Edition will go, the company is putting a $50 difference between the disc and disc-less systems. It's possible that when the holidays roll around later this year the One S All Digital variant will be even cheaper.
"When you look at promotional pricing (this holiday season) ... you can expect that we'll be able to get some pretty aggressive prices with the All-Digital Edition maintaining that $50 gap," Gattis said.
With the current low prices on the One S, Gattis could see retailers putting the All-Digital Edition at an even lower starting price when factoring in the $50 difference.
"You would expect to see the same price delta once this new digital product is available, so I would imagine you'll find some fairly low (prices) out there."
There have been rumors about Microsoft wanting to ditch the disc drive for its next-generation system, but Gattis wouldn't go that far, at least not today. "This is not the end of physical media by any means. What we do think it is, is additive," he said, giving consumers a different, cheaper choice if they plan to buy digital copies of games.
He does, however, hope that by driving costs down the new Xbox will push for further innovation across the industry ahead of the new round of systems and platforms.
"At the end of the day, all this stuff is good for gamers," Gattis said. "It's going to drive innovation, it's going to drive costs down and that's a win for gamers."