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Microsoft Cuts Xbox One Price to $399 Without Kinect, Will Put Media Apps in Front of Paywall

Two big changes six months into the new console's life.

Microsoft got the jump on next month’s E3 gaming show with two major Xbox announcements today: Its six-month-old Xbox One console will receive a $100 price cut to $399 on June for a version without the previously mandatory Kinect camera, and — also starting in early June — online entertainment apps like HBO Go, Netflix and MLB.TV will no longer require a paid Xbox Live Gold subscription.

Both changes represent a shift in strategy. Since it was announced in May of last year, the Xbox One was said to be designed for the Kinect, which can listen for voice commands, see which players are in the room, and even read your pulse. However, the required peripheral made Microsoft’s new console a more expensive option than Sony’s new PlayStation 4, which took an early lead in the latest generation of console sales and even beat the Xbox One at U.S. retail in March, the month of a major new Xbox exclusive.

“To be clear, as we introduce this new Xbox One console option, Kinect remains an important part of our vision,” Xbox head Phil Spencer said in a blog post. More than 80 percent of Xbox owners are “actively using Kinect,” he wrote, and a higher-priced console with the Kinect still bundled will persist.

“If you buy Xbox One for $399 and later decide you want to have all the experiences Kinect enables, we will also offer a standalone sensor for Xbox One later this fall,” Spencer wrote. “We’ll share more details about the standalone Kinect for Xbox One in the coming months.”

Xbox Live Gold, meanwhile, is Microsoft’s paid subscription service initially designed to cover online multiplayer gaming that, with the earlier Xbox 360, later broadened to gate access to all online content on the console. That included separately paid-for subscriptions to services like Netflix, meaning using an Xbox as primarily a Netflix box was a financially less sound decision than buying a dedicated media box like a Roku or Apple TV that lacked the console’s gaming options.

In an interview with Re/code, Spencer agreed with this assessment.

“I know it’s not a fabulous answer, but every other consumer device I buy today has access to those apps and I don’t have to pay more,” he said.

Spencer declined to say whether the company’s upcoming original video content would be in front of or behind the paywall, but that “you can imagine, we’re working on that right now.”

The $60/year Xbox Live Gold subscription will still apply to games and include access to special subscriber-only deals and free downloads of older titles via Microsoft’s Games with Gold program. Games with Gold members will receive an additional free game for Xbox 360 in June, and the program will extend to Xbox One in the same month.

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