Microsoft has launched a version of the Xbox One S that drops the disc drive, aimed at those who are ready to go all-in on digital downloads with a cheaper version of the console. Called the "Xbox One S All-Digital Edition," this iteration of the console has already caused a fair amount of skepticism among Xbox fans. But, looking at Microsoft's past, as well as that of the console industry as a whole, provides some important context as to where a disc-less Xbox One could sit in Microsoft's portfolio.

The cost factor of a disc-less Xbox

If you've been paying attention to the typical cycle of console generations, you'll be familiar with the way manufacturers attempt to squeeze every drop out of a console's lifecycle. That often includes new, revamped versions of existing consoles that are modified in some way to cut prices, either due to the shrinking size and costs of components or by stripping down certain features. Best VPN providers 2020: Learn about ExpressVPN, NordVPN & more We saw this play out with both the Xbox 360 and PlayStation 3. On Microsoft's side, the Xbox 360 Slim managed to shrink the console down while offering models with storage space as low as 4GB. For Sony, we saw something similar, as the PlayStation 3 eventually saw Slim and Super Slim models released. Likewise, Nintendo, perhaps the king of this sort of console refresh, released several iterations of both the Nintendo DS and Nintendo 3DS over the course of their lifespans. It's not at all uncommon to see cheaper variations of existing consoles hit the market. This generation, we've seen something admittedly different, with both Sony and Microsoft outing more powerful versions of their base consoles with the PlayStation 4 Pro and Xbox One X. Both consoles, rather than stripping things out, have focused on providing even more power, with each placing a particular focus on 4K (to different degrees). The Xbox One S was the exception here, launching in 2016 as a slimmed down version of the original, packing a 4K Blu-ray drive, HDR support, and a slight performance increase, with initial launch prices dipping down to $300 for the 500GB model. In other words, it's not uncommon to see variations on existing consoles hit the market as each generation comes to a close. That's particularly true as console manufacturers look to entice more customers and as overall console sales begin to decline while buyers hold out for the next big thing. Eliminating the disc drive on the Xbox One S, Microsoft's cheapest Xbox One model right now, is one way to lower the price of entry even further, particularly for those who may not care if their game library is limited to digital downloads or who don't need a Blu-ray player. Going digital is convenient

Forgetting the implications of the lack of choice involved in dropping the disc drive, it's informative to look at the convenience of an all-digital experience. Looking back at the Xbox 360, that console launched in an environment that was still largely dominated by physical media. Towards the end of its lifecycle, however, digital downloads began to gain more of a foothold. Digital games can be more convenient than their physical counterparts. With the Xbox One, that momentum has only increased. Even for those who may prefer to keep a physical collection of their games, they're often still subjected to a day-one download that can be as large as the game itself. For those who have gone "all digital," doing so simply skips the step of inserting a physical disc into your Xbox. Additionally, all of your games remain accessible on-demand by heading to your collection on your console and pressing a button. There are no worries about losing or damaging a disc. Further bolstering this approach is Xbox Game Pass, Microsoft's "Netflix for games." The subscription service gives you access to more than 100 games with one monthly subscription price of $10. With all Microsoft Studios games hitting the service on the day of their release, and broad third-party support, the service is purposely-built for anyone who is comfortable with going all-in on a digital game collection. Don't worry, discs are here to stay

Even with the convenience afforded by digital downloads, discs are here to stay. Many gamers still prefer owning physical discs, and it wouldn't be in Microsoft's interest to spurn them. The company has done a ton of work to regain good will since the botched 2013 launch of the Xbox One, and it likely won't want to burn those bridges by foregoing discs altogether. As Windows Central's Gaming Editor Jez Corden argued in a recent piece, physical discs give Microsoft a retail presence that is incredibly important for market awareness. Exposure to the Xbox brand is integral to its success, and prominent placement with a wall of games in Walmart and GameStop remains important. Xbox games on disc are here to stay. Whether warranted or not, worry over the staying power of digital licenses means that the market for physical games will remain strong enough to endure. And after the high profile closure of Nintendo's Wii Shop in favor of the Nintendo eShop, it's not a crazy concern. When you purchase any digital game, after all, all you're doing is purchasing the right to play that game. Given Microsoft's expansive focus on backward compatibility, it's hard to imagine Xbox's digital store closing up shop any time soon. However, we have seen some games pulled from the store over the years. The original Forza Horizon and Forza Horizon 2, for example, are a couple of high-profile examples. It's likely that their removal had something to do with licenses expiring for the music used in the games, as Polygon suspected at the time. But while the games are no longer available to purchase, they remain available to download for those who snagged them before their removal. It's all about more options

So what's the goal with the Xbox One S All-Digital Edition? Ultimately, it's about giving people more options across the Xbox One lineup. Anyone who hasn't picked up an Xbox One by this point in its lifecycle probably isn't concerned with having the latest and greatest in the gaming world. Rather, it's more likely that the Xbox One S All-Digital Edition is for parents who might be looking for a gift for their children. For people who have been in Sony's camp for the entirety of this generation, the Xbox One S All-Digital Edition could be a cheap avenue to check out some Xbox exclusives as this generation winds down. This strategy of giving gamers more options lines up with the rest of Microsoft's strategy going forward. Xbox's Project xCloud will give gamers instantaneous on-tap access to any one of their games, whether on Xbox One or mobile devices, through cloud streaming, if Microsoft can overcome the obvious hurdles. The company even looks to be planning the expansion of Xbox Live achievements, social systems, and more to iOS and Android. A disc-less Xbox is in line with Microsoft's current strategy Xbox Game Pass is also a part of this strategy. We already know it is coming to PC, and Xbox head Phil Spencer outright stated the goal is to bring Game Pass to "every device." Imagine playing Halo or Gears of War on the go via Xbox Game Pass on your Android phone, for example. This isn't to say that Microsoft's next generation of Xbox consoles will be all-digital experiences. Rather, Microsoft is rumored to be taking a two-tiered approach to its next generation, targeting two different audiences. Reportedly developed under the codename "Scarlett," the duo of Xbox consoles (referred to as "Anaconda" and "Lockhart") are rumored to be made up of one traditional, powerhouse console and one that's less cutting-edge and focused on delivering a lower cost and, potentially, with a focus on xCloud game streaming. It is possible we could see the disc drive go away on the cheaper of Microsoft's two rumored next-gen consoles, but you can bet on it sticking around with the more powerful iteration.