Microsoft will start selling its XBox One entertainment console without the Kinect motion detecting sensor and without a requirement to sign up for a monthly membership to access many online services.
The technology colossus announced Tuesday its gaming console will soon be available in a stripped-down version for $399 US, a $100 discount from the launch price, and also won't require gamers to pay for a monthly XBox Live membership to access third-party services like Hulu, Netflix, and HBO To Go.
The membership will continue to be required for multiplayer games but will also provide discounts on games and free games.
XBox's new head Phil Spencer said unbundling Kinect was important to reaching more fans.
"Value is important," he said in an interview. "Making sure you have an opening price point that can reach as many people as possible is critical."
Spencer added that it no longer made sense to reserve apps such as Netflix and YouTube to paying subscribers since such apps are widely available on DVD players and other internet-connected devices.
The move is widely seen as an attempt to catch up with rival Sony's PlayStation 4, which has seen stronger sales.
Both devices came out in November but while the Xbox exploded out of the gate with 3.9 million units sold over the holiday quarter, that number slower to 1.2 million in the first three months of 2014. Playstation saw no such slowdown and as it stands, Playstations have outsold XBoxes by seven million to 5.1 million.
The new price comes into effect on June 9.