REDMOND – Microsoft Corp. [NASDAQ:MSFT] has reduced the price of its latest Xbox One gaming console in competition to its rival, Sony PlayStation 4. Starting from June 9, Microsoft will offer the Xbox One for $399 in all markets where it’s sold — a $100 price cut from the bundled version with Kinect.

Now, Microsoft is offering the Xbox One without the accompanying Kinect motion-control system. Customers can place pre-orders now at Microsoft Store website.

The company had announced the new Xbox One at the price of $499 last June at E3, to a live audience. It was greeted with a shocked silence and since then Microsoft has tried its best to persuade gamers that the price would prove a bargain. This $100 price cut from the bundled version with Kinect, will allow the company to add Microsoft’s Kinect motion and voice sensor, which accounts for the steeper price.

With this move Microsoft’s pricing for the Xbox One has come to at par and in direct competition with rival Sony’s PlayStation 4, which also costs $399. Although both consoles were launched around similar time last year, the PS4 has outsold the Xbox by a lead of about 2 million units in the gaming race.

In a post Tuesday morning, Microsoft also announced the Xbox One and older Xbox 360 console will no longer require a Live Gold subscription, which cost $60 a year, to access streaming apps like Netflix, Hulu Plus, YouTube and HBO Go. The PS4 does not charge a subscription fee for access to streaming services.

“We balanced the two pulling factors,” says Xbox’s Yusuf Mehdi, who is vice president for strategy and marketing. Some customers, he admits, were just not willing to shell out $499.

“Your feedback matters to us and it shapes the products and services we build,” said Xbox chief Phil Spencer in announcing the move, which suggests Microsoft heeded gamers’ complaints that the Xbox One was too expensive.

Microsoft will continue to sell a premium Xbox One system, with Kinect, for $499. If a user wants to buy an Xbox One for $399 and decides to purchase Kinect later, a standalone Kinect sensor will become available for sale this fall, Microsoft said.

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