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Why $249 is an unsustainable price for the first all-digital Xbox

Enlarge / Microsoft needs to give customers a better deal to convince them to give up discs for good. (credit: Dazzied / Flickr)

Today’s announcement of the previously rumored “All-Digital Edition” of the Xbox One S is one of the few instances when a redesigned version of a home console is, from a features perspective, strictly worse than the version that came before it. The removal of the disc drive means the All-Digital Edition can’t play Blu-rays, DVDs, or old disc-based games you (or GameStop) might have lying around, and it won’t let you resell any games you might buy for it. The new box isn’t even any smaller, even though the bulky optical drive has been removed.

Microsoft intends to make up for this loss of features with a lower price point for the new unit, which will sell for a $249 MSRP starting May 7. But that suggested price point—while technically lower than the official $299 MSRP for a 1TB Xbox One S bundle—doesn’t seem likely to convince many people to invest in the disc-free console future.

An old low price?

To understand why $249 is such an odd MSRP for this new, less-capable Xbox One, we have to look back at the history of Xbox One pricing. After a higher-than-expected $499 launch with a bundled Kinect, the Xbox One saw some relatively rapid price reductions after the 2014 Kinect unbundling. By September 2016, players could already get into the Xbox One ecosystem (with a bundled game) for the low, low price of $249.

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