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The Globe and Mail

Xbox One dumps Kinect to sell console for $399

This box looks mighty lonely without the Kinect cluttering up the image. But don’t worry, it’s not a full bore divorce, more like a separation.

Microsoft Canada

Microsoft is lowering the price of the Xbox One, just in time for the annual E3 gamer convention in Los Angeles.

Until now, the new generation console came bundled with the motion– and voice-sensing Kinect and sold for $499. Now the company has announced it will sell the powerful game machine on its own – consciously uncoupling it from the Kinect – for just $399, matching the price of the Sony PlayStation 4, its main competitor.

"I don't think about it as a divorce," says newly promoted head of Microsoft's Xbox unit, Phil Spencer. "I just think about it as giving consumers choice as they walk in the store ... A hundred dollars is a hundred dollars."

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The new lower price may help Xbox catch up to its Japanese rival. Reports in April suggested 7 million PS4's had been sold since launch, taking an early lead over Xbox's sales of about 5 million. Both devices launched in November, 2013.

The new Kinect-free Xbox will hit store shelves on June 9; not coincidentally the same day as the big E3 press conferences for Sony and Microsoft. In an interview with the Globe and Mail Mr. Spencer said announcing the price cut now will allow Microsoft to focus on "games, content and creators" at E3 instead of "policy and product."

The option to buy an Xbox without Kinect was something gamers have asked for ever since the gaming machine was first unveiled in May, 2013.

"A lot of consumers for these machines still just want to play games," says Heloise Thomson of Enders Analysis. "The Kinect was a huge part of their E3 2013 showcase and was meant to demonstrate that Microsoft had a different vision for their hardware – which they do. The app-switching function works best when communicating through Kinect, and the Xbox One's versatility as an all-in-one media player are fundamental to their product narrative. A lack of support for the TV functionality (which validates the app switching) in Europe is another drag on interest outside North America."

Mr. Spencer stressed that under his leadership the Xbox team would put user feedback at the centre of their planning.

"For me this was an easy decision," says Mr. Spencer. "Consumers are the players, they are the people that vote."

It wasn't always thus: When Spencer's former boss Don Mattrick first showed off Xbox One he insisted that it would require an always-on Internet connection, which, like the bundled Kinect, was central to the very conception of the console. After being pilloried by gamers and competitors alike during 2013's E3, Mr. Mattrick was forced to execute an about-face on June 21, dropping the always-on features: "We have listened and we have heard loud and clear from your feedback that you want the best of both worlds." He left Microsoft just weeks after that climbdown.

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But today's news doesn't mean Kinect is as doomed as always-on was, particularly for the popular dance, sports and music games that rely entirely on motion controls (new versions of which Spencer said were on the way). Fortunately for Microsoft, wider integration of Kinect into more traditional button mashers has been slow, and where it exists it can be easily turned off. "What we haven't seen, frankly, is people forcing Kinect in all kinds of genres, and I think that's a good thing.

"I remain, and we remain, very committed to Kinect. I think the best experience on Xbox One is with Kinect. We've invested thousands of man hours in the experience around Kinect with voice and gesture to control the TV experience in the home."

Another possible reason to make Kinect optional might be to clear the shelf space for a new peripheral, like the VR headsets from Occulus and Sony's Project Morpheus. But Spencer poured cold water on any speculation about that: "We have a couple incubations going on in house, but nothing I'd say right now that's close to coming to market ... I think the technology probably still has a couple iterations to go before it's really mass market."

Mr. Spencer also announced some changes to Xbox Live, the company's subscription service for online content and multi-player gaming. The main gain for users will be free access to entertainment apps such as Netflix, previously users needed a premium price Gold Membership to access such services as GoPro, HBO GO, MLB.TV and NHL Game Center. Considering that most of those apps need their own subscriptions, it was irksome for gamers to pony up for Xbox Live. Now anyone who owns an Xbox 360 or an Xbox One will have access without a secondary paid subscription.

"The Xbox 360 hit the market as the affordable alternative to the PS3, and garnered a demographic of consumers that values every dollar," says Ms. Thomson. "It's not surprising that those same consumers, during a lingering recession, would find a higher price less enticing. Now that the PS4 and Xbox One sit equally on the shelf in terms of cost, Microsoft can sell their machine's unique features with a clearer voice."

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