That sounds like the PSP Go Sony tried to pull on US a while ago! MS is bringing us the future I guess... 

I don't think it's necessarely a bad thing, however it should be priced very aggressively, maybe 300$ because it's still weaker than the PS4 and offers only drawbacks at the same price...

MS should stop believing they offer a premium device and embrace their lower end status... price accordingly, take a hit on the hardware profits (like Sony does) and make the money back on the software sales, I think a lot more people would be willing to bite the bullet, and when the pricing makes sense people "get it" without feeling cheated... right now they are selling a fully equiped Camry for the price of an Audi S8 or something, not many people will embrace it.

So I see the comments are ignoring the aspect of the retailer businesses' interests.
A discless XBone means that is the last $$$ the retailer can expect to see from that customer.
Instead of buying the disc from the local retailer, all games will be downloads, removing their retail profit.
If MS did such a thing, why would these retailers be motivated to sell XBones?,
most of them are making strong efforts to sell them, helping MS, because PS4 is not in stock but XBone is.
Every retailer would just prefer to sell only PS4, because those still have discs (and retail profit on those).
Even if they can't get as many PS4 immediately, every XBone sold will to some extent reduce PS4 sales,
as some people will get both consoles but many won't, so the retailer might as well not sell the console
that will reduce their future game disc sales. Even if they can't sell the PS4 because they're out of stock,
if they refuse to sell XBone, and the customer gets PS4 from another store,
that customer is still in the market for game discs and the original store could still make $$$ of them,
unlike a discless XBone whose customers will buy game discs from no retailer.

This 'leak' came out amidst a huge amount of 'leaks', which have been speculated to be FALSE leaks planted with specific employees to determine who the leaker is by seeing which false leak is disseminated.

PSP Go also didn't have a peer competitor, so retailers did not have any leverage vs. policies that would remove their game disc sale profits.

If XBone tried that, retailers can just stop selling it, or ordering more after they clear their inventory.

If they did continue to sell it, they would certainly seek a higher mark up than for PS4 to make up for lost game disc sales potential.

That would defeat the point in removing a $20 part from the unit.

What evidence do you have that Sony takes a hit on hardware profit vs Microsoft?

Sony's CPU/GPU is slightly smaller, thus cheaper, than MS' despite having 50% more cores (and 2x the ROP, and 8x GPGPU threads),

because MS put ESRAM on-die to compensate for slow RAM, and that takes up a huge amount of die space.

Sony's RAM may be marginally more expensive, but MS has also stated that Kinect2 costs $150 while they charge only $100 more.

If anything, I might guess that MS is making less profit on initial console sales.

Sony has stated that they are making a small profit on each console if one game sale  is included, which is a given.

And Gamestop, and GAME, and every brick and mortar consumer electronics retailer around the world?

If those werent' useful to MS or Sony, they wouldn't bother with logistics of dealing with thousands of different retail stores.

Having product on the shelves in retail stores helps sales, and this is why relations with brick and mortar shops is important.

Came to say this. Why the fuck would retailers want to sell that thing? Retailers like Gamestop would lose huge amounts of revenue if a X1 with no Disc Drive became popular.

Digital downloads are more profitable, so pursuing a profit maximization strategy, MS/Sony should logically reduce their prices to sell more of them vs. Discs, which reduce future sales prospects thru 2nd hand market along with larger cost of production, distribution, and retail cut of the sales profit. The high price of digital downloads, despite that because they can't be sold as 2nd hand (which potentially reduces sales of original games), clearly shows that MS and Sony are catering to the brick and mortar retail interests by specifically NOT marginalizing their game disc sales.

If MS did do something like this, then besides options like not carrying XBone, not pushing it as heavily as they do, retailers would likely just raise their prices on it to make up for lost future game disc sales.  Which wipes out the entire point of removing a $20 part to make a cheaper SKU.

Innovation? How is this remotely innovative? PSP go did this, steam does this. I can go fulll digital now on PS3, ps4, x1, and still have a  choice...all this does is limit choice in a poor way to compete. All digital is already here.

the rumor said they thought about it and were testing it no that THEY WOULD release one

Must be some pretty intense testing there, not having a BluRay drive installed...

You know the old saying: It's the thought that counts ;)