Microsoft has announced a new model of its Xbox One console, a digital-only version that will not be able to play discs and costs less than its siblings.

The Xbox One S All-Digital Edition is functionally and visually identical to the existing Xbox One S console, apart from the absence of a disc drive. It’s aimed at “digital natives”, according to Microsoft’s Jeff Gattis – primarily teens who grew up without the discs and cartridges that older games relied upon. It is out on 7 May, and will cost £199 in the UK and $249 in the US, significantly cheaper than the other Xbox One models. It will come with Minecraft, Forza Horizon 3 and Sea of Thieves pre-installed on it s1TB hard drive, and a discounted subscription to Xbox Game Pass, which offers a library of more than 100 games for a monthly fee.

The disc-less model is not intended to replace disc-based Xbox Ones, Gattis insists, despite a huge market shift towards subscription services and downloadable games in the past few years. “We’re not looking to push customers toward digital; it’s about meeting the needs of customers that are digital natives that prefer digital-based media,” he says. “I’m not able to talk about future generations [of Xbox consoles]: for now this is a choice that buyers can make, and the market can take things where it wants to take it.”

The Xbox One S Digital-Only Edition is only the second video game console to rely entirely on game downloads instead of discs or cartridges: the first was Sony’s portable PSP Go, released in 2009. Microsoft has been working on a next-generation Xbox console for some years now, and is widely expected to announce it at this year’s E3 video game expo in June.