Microsoft Dumps the Kinect in First Big Xbox One Price Cut

Microsoft is making its all-in-one entertainment console more affordable, and after a newly announced Xbox One price cut it appears it’ll hardly be able to call it an all-in-one entertainment console after all.

Earlier today Microsoft formally announced that it’d would be making a lot of key changes to its Xbox One strategy. The first of those key changes is giving users “more choice.” Just as reports indicated yesterday, Microsoft is expanding the Xbox One hardware line-up to include a version of the Xbox One that doesn’t have a Kinect 2 sensor.

The Xbox One without a Kinect 2 will cost users $399 beginning June 9th, about $100 lower than the previous Xbox One bundle that Microsoft made available to customers. To be clear, Microsoft still plans to continue selling the Xbox One with a bundled Kinect 2 sensor for the same $499. Presumably, it’ll still come with a copy of either Titanfall or Forza 5.

So what happens to users who purchase the Xbox One without Kinect 2 considering how essential the sensor is to most of the console’s entertainment experiences? Just like with the Xbox 360, Microsoft is hoping that segmenting the Xbox One install base will help lift its sales numbers. This fall Microsoft will sell the Xbox One’s Kinect 2 sensor separately from the console itself. This will allow those buying the base model to have the option of picking up the Kinect sensor in the event they get the console home and find that it’s infinitely less useful than they thought. How much Microsoft plans to sell the Kinect 2 sensor for separately remains unclear. The last generation Kinect Sensor debuted on store shelves on its own for $149.99.

Just as a report from GottaBeMobile speculated earlier today, Microsoft has confirmed that it will be realigning the features users get with Xbox Live Gold. In June, Microsoft will move entertainment apps outside of Xbox Live Gold. That means users will be able to watch Netflix and enjoy other streaming media services without having to pay for an Xbox Live Gold subscription each month.

While this new Kinect-less Xbox One bundle might damage the system;s prospects in the long-term by removing core features, removing Xbox Live Gold as a requirement for users who’ve already paid for a streaming service is the right move. That’s especially true since the Xbox One and Xbox 360 were the only two living room consoles that required users to pay Microsoft before they could use the services they were already paying for. In addition to unlocking those apps Microsoft also says that beginning in June all users will have access to Microsoft-made apps too. That means Internet Explorer and OneDrive will be available absolutely free of charge to Xbox One and Xbox 360 owners.

Really, the only benefits Xbox Gold users will continue to enjoy are cloud storage for their game clips, special discounts for Xbox games, two free games a month, and online multiplayer. Going forward, the OneGuide, the system that allowed users to browse channel listings will also be available for free to all Xbox One users. Xbox Fitness, the personal training app and service that puts real trainers like Shaun T in user’s living rooms, will continue to be a perk of having an Xbox Live Gold account until December.

Read: Microsoft Could Eliminate Xbox Live Gold for Netflix and Hulu 

It’s those two free games a month that are going to be the biggest draw for potential Xbox Live Gold users going forward. Microsoft says that it’ll finally begin making free games available to Xbox Live Gold users who have the Xbox One. In June those games will be Max: The Cure of Brotherhood and Halo: Spartan Assault, two games that Microsoft’s own in-house studios released to the Xbox Store shortly after the Xbox One’s launch. Xbox 360 users will get Dark Souls, Charlie Murder and Super Street Fighter IV. Microsoft says it’s providing Street Fighter as a special bonus. Free games downloaded on the Xbox One will stop working if a user doesn’t have an Xbox Live subscription.

Now, the only thing Microsoft can do is spread the word about these changes and hope that it boosts sales of the Xbox One. Reportedly, sales of the console had been steady, but Microsoft has sold millions less of the Xbox One than Sony has of the PS4. To be fair, the Xbox One is only available in a fraction of the countries that the PS4 is in. Last year rumors indicated that the discrepancy stemmed from the need to localize the Kinect 2 sensor for each market and language. If that’s true than Microsoft could make serious changes to the timeline it’s already shared for getting the Xbox One in other countries since the Kinect 2 won’t be included with every console. The Xbox One isn’t scheduled for release in Asia until this September.

Introducing an Xbox One without a Kinect 2 sensor will likely cripple video game support for the sensor. Convincing developers to create games for the console would have been much easier when Microsoft could point to the total number of Xbox One’s sold. Without that, the Kinect 2 sensor is likely to run dry of games in the same way the original sensor for the Xbox 360 did. It’s also worth noting that the sensor that allows the Xbox One to talk to televisions and cable boxes is also built into the Kinect 2 sensor. Without that sensor Microsoft has just rendered the live television app utterly useless for $399 Xbox One buyers.