Cheaper Xbox offering without Kinect spikes US sales

Xbox remains a successful side business for Microsoft, its CEO said

Sales of Xbox One gaming consoles more than doubled in the U.S. last month because of the introduction of a cheaper version of the console that doesn't include the Kinect motion sensor.

Microsoft saw a strong spike in sales after it introduced the US$399 Xbox One without Kinect that is a hundred dollars cheaper than the one that includes the motion sensor, Microsoft said Wednesday. After the new offering was launched on June 9, Xbox One sales doubled in the U.S. compared to May, while Xbox 360 sales showed solid growth, it said.

Microsoft did not provide the exact number of Xbox One consoles sold in June and said the information was based on internal data.

The sales spike comes on the heels of Microsoft CEO Satya Nadella putting to rest rumors that there are plans to sell the company's gaming division.

In a memo sent to all Microsoft employees, Nadella said last week that while Xbox is no core business for Microsoft, it can be a side business in which Microsoft can have a fundamental impact and success.

"Microsoft will continue to vigorously innovate and delight gamers with Xbox," he said, adding that Xbox has a growing online community and an enthusiastic fan base.

Moreover, Microsoft benefits from many technologies flowing from its gaming efforts, Nadella said. For example camera technology in Kinect for Windows, speech recognition in Skype and also what Microsoft calls the Natural User Interface (NUI) for Windows 8 are all derived from technology developed for Xbox, Nadella said. The NUI is a project that uses Kinect and aims to combine inputs such as gesture and voice to control a computer.

"Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft," he said.

New Xbox owners can look forward to a number of new games coming out this year, including a new Halo game and a new version of racing game Forza Horizon. And in August, American football game Madden NFL 15 will be launched for Xbox, Microsoft said, adding that new blockbuster hits will launch for Xbox One throughout the fall.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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Loek Essers

IDG News Service
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