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Microsoft cuts Xbox One price to $399 without Kinect, will put media apps in front of paywall

A man uses an XBox One while waiting to buy a console from a Microsoft pop-up shop at the Time Warner Center in New York.
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A man uses an XBox One while waiting to buy a console from a Microsoft pop-up shop at the Time Warner Center in New York.

Microsoft got the jump on next month's E3 gaming show with two major Xbox announcements today: Its six-month old new console Xbox One will receive a $100 price cut to $399 for a version without the previously mandatory Kinect camera, and—starting in June—online entertainment apps like Machinima, 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 exclusive.

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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.

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.

CNBC's parent NBC Universal is an investor in Re/code's parent Revere Digital, and the companies have a content-sharing arrangement.

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