Microsoft on Wednesday said that it would sell a lower-priced version of its Xbox One console without the Kinect motion detection system.
The move comes with Microsoft locked in a tough battle with Sony, which has been leading the game console market with its next-generation PlayStation 4.
The Xbox One without Kinect will be sold starting June 9 for $399, the same price as the PS4, according to a blog post by Phil Spencer, head of the Xbox division.
"Your feedback matters to us and it shapes the products and services we build," Mr Spender said, adding that the console will still "deliver access to the best blockbuster games" and a range of other content.
Microsoft said in April it had sold 5 million Xbox One units since last year's launch, well below the 7 million PS4s sold by Sony.
One of the reasons cited by analysts was the $100 price difference between the two devices.
The Xbox One with the Kinect voice control and motion detection will remain at $499.
"We've heard that you want more choices from Xbox One. You want a wide variety of options in your games and entertainment experiences and you also want options in your hardware selection," Mr Spender said.
He added that the company will offer the Kinect sensor as an add-on for buyers who decide they want that option later.
The Xbox One is being sold in 39 countries and is set to launch in China later this year.
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