We all knew this was coming, right? The writing was on the wall, or rather in the sales numbers. Microsoft has announced plans to release a cheaper Xbox One bundle. Instead of sacrificing any of the device’s inner workings, the company has opted to cut Kinect from the lower-priced package.

In an interview with CNET, Xbox executive Phil Spencer explained the new packaging is a response to consumer feedback. “It was really all about consumer choice. Like we would have said on 360, the best experience was with the biggest hard drive possible. On Xbox One, I think the best experience is with Kinect,” he said. “In the long run, I think we’ll actually end up with more Xbox Ones with Kinect out there with this strategy.”

According to recent reports, Sony’s PlayStation 4 currently leads the XBO in sales by about 2 million units, even with the release of the blockbuster Titanfall. Clearly a change was needed. Despite making the peripheral optional, the company will continue to push forward with the Kinect and develop it for future uses. In a video posted on the Xbox YouTube channel (see below), Spencer said, “We’ll continue to innovate on Kinect, I think it’s an important differentiator for us, but I also know there are people out there who want to make the choice when they want to make it.”

Microsoft also announced another change. Gamers will no longer need Xbox Live Gold to use streaming apps like Hulu, Skype and Netflix. However, they will still need the subscription to download FTPs and multiplayer games. The company will offer pro-rated refunds for those opting to cancel the service in light of the news. The option will become available after the release of the June system update.