Microsoft to Launch a Lower Cost Version of Its Xbox – MSFT

Microsoft (MSFT) lowered the price for its Xbox One videogame console by $100 Tuesday, in an effort to increase demand for the device just six months after it was initially released.

The new version, which will cost $399 and won’t include the motion and voice sensor Kinect – a device that until the announcement was bundled with every Xbox One sold, will be available on June 9 in all markets where the device is available, the software giant revealed in a statement Tuesday.

Microsoft said it will continue to offer Xbox One models with Kinect for $499. Console owners that buy the $399 model will be able to purchase Kinect separately if they choose to upgrade.

Microsoft cited consumers seeking a more affordable alternative as a reason for a $399 model. In fact, the $100 difference with the Xbox One was cited by some consumers as a reason they chose Sony’s PlayStation 4 over Microsoft.

“We’ve heard that you want more choices from Xbox One,” said Phil Spencer, head of Microsoft’s Xbox group, in a statement, adding that the company remains committed to its Kinect motion sensor based on the fact that more than 80% of customers use the Kinect today with an average of 120 voice commands per month on each console.

In the meantime, Sony’s console appears to have taken a sales lead, topping 7 million PlayStation units worldwide since launching in November 2013, up from six million it had counted in March. That compares with the five million Xbox One units Microsoft said it sold to retailers around the globe.

The price change puts now Xbox One on par with Sony’s PlayStation 4, which launched last November for $399.

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