Microsoft launches $250 Xbox with no disc drive

Key Points
  • Microsoft plans to keep the price of the Xbox One S All-Digital Edition lower than that of the Xbox One S console that contains a disc drive.
  • Gaming represents 9 percent of Microsoft's revenue.
Satya Nadella, chief executive of Microsoft, speaks during a panel session on day three of the World Economic Forum in Davos, Switzerland.
Jason Alden | Bloomberg via Getty Images

Microsoft on Tuesday introduced its first gaming console without a disc drive, meaning that gamers will have to download games instead of loading them on a disc in the traditional way.

Just as online services are becoming important for Microsoft's Windows and Office properties, gaming is also becoming more internet-centric. New hardware reflects a Microsoft gaming division that's also embracing the wider corporate shift.

Gamers can now pre-order Microsoft's Xbox One S All-Digital Edition for $249.99, or $50 less than the Xbox One S that contains a disc drive, and the new system will become available through retail channels on May 7, according to a Microsoft blog post.

"We expect to maintain at least that price difference between the two consoles going forward," Microsoft's Larry Hryb, better known by his "gamertag" Major Nelson, wrote in the blog post.

Microsoft's One S All-Digital Edition.

Microsoft is including three games -- "Minecraft," "Forza Horizon 3" and "Sea of Thieves" with the new console, which comes with a 1TB hard drive and a wireless controller, Major Nelson wrote. The console can access games and backups online and play their games on any Xbox One.

People can download and games through the new console, and access online services like Netflix. But Microsoft has also been developing a service for streaming games from cloud-based data centers. Apple and Google also recently talked about new gaming services.

Microsoft announced the inaugural Xbox in 2001 and the Xbox One S in 2016. Gaming now provides Microsoft with $10 billion in annual revenue -- more than 9 percent of the company's total revenue.

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