Microsoft is preparing to sell a new Xbox unlike any it's offered before. The gadget is missing a disc drive.
The new device is called the Xbox One S All-Digital Edition, and it's been designed for "digital natives," Microsoft said. In particular, people who buy most of their stuff over the internet, including video games.
The device launches May 7, with preorders starting Tuesday. And at $250 (£200), it's $50 under the suggested retail price for the standard Xbox One S. To sweeten the deal, Microsoft is giving away three of its games along with the device: the 2016 racing game Forza Horizon 3, the 2018 online multiplayer pirate game Sea of Thieves, and the gaming phenomenon Minecraft. (Note CNET may get a share of revenue from the sale of the products featured on this page.)
Microsoft also said it plans to keep the price of its discless Xbox at $50 below that of its disc-using cousin, the Xbox One S, which isn't going away. It unveiled the discless device as part of a company livestream Tuesday called, during which it also announced a new Xbox Game Pass Ultimate for $15 a month.
"It's about offering choice," Jeff Gattis, Microsoft's general manager of platform and devices marketing for the Xbox, said in an interview. "I don't see the disc going away."
As the internet has invaded our lives, changing the way we get our books, music and movies, it seemed only a matter of time before it would change the way we get video games, sending game discs the way of the dinosaur.
Already, millions of people buy and download games over the internet, the same way they buy music and movies from Apple's iTunes Store.
About half of millennials and Gen Z teenagers who responded to surveys from Nielsen's SuperData Research said they bought physical game discs in the past three months. And Microsoft said two-thirds of the top 10 games last year were purchased and downloaded over the internet.
For those reasons alone, Microsoft creating a discless Xbox makes sense.
But it's also a sign of things to come. Games aren't just going discless. Soon, you won't have to download them either.
In the next few years, game companies expect, people will start regularly streaming their games, playing titles like Microsoft's Halo space epics or Ubisoft's Assassin's Creed action adventure series in a way they's similar to how they watch movies from Netflix. Already, big-name players are preparing. For half a decade, Sony has offered its PlayStation Now service, and later this year Google's Stadia will launch as well. Game maker Electronic Arts said last year that it's working on a streaming service too. Even Microsoft is developing one, called Project xCloud.
For all this to work, analysts say, people's internet connections need to get faster and more reliable, and companies need to offer social tools, stunning visuals and other features that make gamers feel streaming is a better alternative to merely buying a disc.
Long time coming
Microsoft may be the first to offer a discless modern mainstream game console, but it almost wasn't. When Sony was developing its rival $299 PlayStation 4, it considered ditching gaming discs as well. But when the device launched, just a week before Microsoft's Xbox One in 2013, it stuck with discs.
There were several reasons, people involved in the project said at the time.
In particular, top games these days can be tens of gigabytes to download, requiring hours of wait time even on high-speed broadband. Another is that other parts of the world don't have good internet connections, including the temporary homes of military service members, who often play sports games like the annual Madden football game from Electronic Arts.
Shawn Layden, head of Sony's home-grown game division for the competing PlayStation game console, saidearlier this year that as the game industry continues to expand, it needs to offer devices that can work in all manner of situations. "If the PlayStation continues to grow at this rate, we can leave no gamer behind," he said.
Which is part of why Microsoft is positioning the discless Xbox as an option. Its parts are the same as those in the existing Xbox One S, except it doesn't have a disc drive. That's let Microsoft cut down on costs, offer a cheaper device, and lean in on what it believes the next generation of gamers are doing.
As part of that, Gattis said, game retailers will offer digital download codes instead of discs when asked. That's particularly important, he added, because Microsoft research has found teenagers today are three times more likely to buy in a store than online.
Michael Pachter, an analyst at Wedbush Securities, said that though the device might appeal to some people, he sees it mostly as a way for Microsoft to say its Xbox lineup starts at $249, as opposed to Sony's and Nintendo's , which both start at $299.
"I see this as only appealing to price conscious consumers who don't have an Xbox and don't care about physical media," Pachter said. "They'll sell a few, it's essentially a price cut."
First published April 16 at 2:10 p.m. PT.
Update, 2:18 p.m. PT: Adds details about Xbox Game Pass Ultimate subscription service.