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Microsoft is working on two new cost-cutting Xbox One consoles — one with a disc drive and one without — for next year, according to a report from Thurrott.

The news comes the day after Variety first reported that Sony would not be attending next year’s E3, a move that could be tied to the company’s push toward its next-generation PlayStation.

The two consoles sound like they’re being designed specifically with an eye toward reducing the cost of the Xbox One as the lifecycle of this generation of game systems start to come to an end. Thurrott reports that new consoles will likely cost less than $200. Creating a less expensive version of an existing game console is a common move for platform holders as a system nears the end of its current-gen life. Both the PlayStation and Xbox received cheaper versions last generation.

Most interesting, though, is that one of the two systems won’t use a disc drive, instead relying on a hard drive and digital games. Launching alongside that, according to Thurrott, will be a “disc-to-digital” program that will allow gamers to turn in a physical disc in exchange for a digital download of the same game. While it’s not surprising that Microsoft is nosing around the idea of digital-only games, this is a smart way to conduct a referendum of sorts about gamers’ willingness to part with their discs, without running into the same sort of backlash and bad press that hit the company when it first announced a very different sort of Xbox One.

Thurrott’s reporting fits in neatly with what Phil Spencer, Microsoft’s vice president who oversees gaming, told Variety at E3 earlier this year after announcing that the company was working on multiple Xbox game consoles. Specifically, he spoke of Microsoft’s aspirations to lower the barrier of entry for gaming on consoles and everywhere.

“There are 2 billion people who play video games on the planet,” he said. “The business is over $150 billion and both numbers are growing by double digits.

“Then talk about Microsoft, which is a huge company with huge aspirations and this is a business we are in with great leaders, great teams, great fans. I love the Xbox One team, they did an incredible job with that and we have a long-term commitment to the console space, but when you think about 2 billion people, we’re not going to sell 2 billion people a game console.”

Spencer also affirmed that the company was working on what most would consider to be a “traditional” game console.

“When I say console, I mean console the way you and I grew up playing consoles,” Spencer said. “It’s a device I play on a screen that has high-fidelity experiences, that’s highly immersive and is the way I play most of my games.

Strategically, this is important to us. Our content partnerships are from consoles. The foundation of our great relationship with EA, Take-Two, Activision is the fact that we have a console and those companies do an amazing business on that console. We are a platform provider for that. When people hear Xbox they think about a console plugged into a TV. More and more I want to think about how I get access to what I want everywhere, but the center of the experience we have on the console is something we are committed to.”

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