Microsoft is beginning to phase out its current generation of hardware. The company is ending production for Xbox One X and Xbox One S All-Digital Edition. This comes as Microsoft prepares to launch the next-generation Xbox Series X this holiday.

Microsoft confirmed the discontinuation in a comment it sent to the Verge:

As we ramp into the future with Xbox Series X, we’re taking the natural step of stopping production on Xbox One X and Xbox One S All-Digital Edition. Xbox One S will continue to be manufactured and sold globally.

At first glance, this may seem like an odd move. Xbox boss Phil Spencer just today reiterated that Microsoft isn’t trying to force players into the next generation:

We want every Xbox player to play all the new games from Xbox Game Studios. That’s why Xbox Game Studios titles we release in the next couple of years — like Halo Infinite — will be available and play great on Xbox Series X and Xbox One.

So if next-gen games are going to continue working on the Xbox One X, why discontinue the console? The answer likely points to the less-powerful Xbox Lockhart Microsoft is going to debut in August, according to sources. That system will replace the One X as an option between the Xbox Series X and the Xbox One.

Xbox Lockhart is going to make Xbox One X obsolete

Microsoft hasn’t confirmed Lockhart, which may also get a name like Xbox Series S. But reports surrounding this mysterious next-gen Xbox suggest it’s meant as a 1080p alternative to Xbox Series X. It will have the same CPU and SSD, and it may come with a comparable memory solution. But Microsoft is scaling back on the GPU to let gamers play the same games at a lower resolution.

Even with a slower GPU, Lockhart should easily match Xbox One X in terms of quality. But the key differentiator will be price, which is why Xbox One X doesn’t make sense anymore.

Microsoft and Sony have said nothing about the price of their next-gen boxes. But Lockhart is obviously going to sell for less. If I had to guess, I’d put it between $300 and $400.

A $300 price tag might seem unrealistic, but Microsoft is adopting an aggressive strategy with its leap to the new Xbox systems. The company could, for example, sell a $300 Xbox Lockhart without a controller.

“Your Xbox One gaming accessories come into the future with you,” writes Spencer. “The Xbox Elite Controller and Xbox Adaptive Controller all work on Xbox Series X, so you don’t have to purchase new controllers.”

One of the advantages of maintaining compatibility with Xbox One gamepads is potentially eliminating that cost. A lot of people may want a new Xbox, only have a 1080p TV, and already have a controller lying around. By appealing to those customers, Microsoft could have a $300 next-gen Xbox on store shelves this holiday or soon after.