The game console was designed to shut down if it wasn't connected to the Internet at least once every 24 hours.
The Xbox One will still ship with the new version of the Kinect camera, but connecting it will no longer be mandatory, Microsoft Chief Product Officer Marc Whitten told IGN.
"Like online, the console will still function if Kinect isn't plugged in, although you won't be able to use any feature or experience that explicitly uses the sensor," Whitten said.
When it launched the Xbox One, Microsoft made much of the console being a full package, shipping with both Kinect and a controller. Microsoft highlighted that the controller and Kinect sensor worked together, telling people back in May that "Kinect does require to be connected to Xbox One in all cases."
The latest policy reversal follows Microsoft removing its infamous "Internet check-in" requirement, which would shut down key features of the Xbox One, such as offline single-player gaming, if it couldn't connect to the Internet at least once every 24 hours.
Whitten did note that the Kinect could also simply be turned off if people had fears about the device collecting information on them.
"You have the ability to completely turn the sensor off in your settings. When in this mode, the sensor is not collecting any information," he said.
Potentially dumb question, given it was set up with all these features, can they still activate them later with 'updates' etc?