The move brings us closer to making video game discs into museum relics alongside the old Sega and Nintendo cartridges from previous consoles.
With the new all-digital Xbox, gamers will be able to start with three digital games pre-downloaded on the console, including Minecraft, Sea of Thieves, and Forza Horizon 3. From there, they'll be able to build their own library of digital games onto the 1 terabyte hard drive.
Saves, backups, and other game data are available on the cloud.
And no more long lines around the block when big games launch. The console will offer the ability to pre-install upcoming games so you can play the second they release.
For now, game discs will continue to exist, but you'll only be able to play them on other Xbox One consoles.
The Xbox One S All-Digital Edition is set for release on May 7.