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Sources: Smaller Xbox One Coming This Year, More Powerful Xbox One In 2017

Microsoft is preparing at least two new Xbox models for release in the next two years, sources tell Kotaku. Later this year we’ll see a cheaper, smaller Xbox One, and next year Microsoft will release a more powerful version of their premiere console.

The 2017 Xbox, which is codenamed Scorpio, will have a more powerful GPU, according to three people familiar with this model, speaking anonymously because they were not authorized to speak about Microsoft’s plans. We hear that it will also be technically capable of supporting the Oculus Rift and that Microsoft is pursuing a partnership with Oculus.

As for 2016, sources have told us there’s at least a more compact version coming by year’s end. One source believed it will include a larger 2TB hard drive, double the capacity of the most spacious current model. We’re expecting Microsoft to announce the more compact machine at E3 next month. (Kotaku’s Jason Schreier and Kotaku UK’s Keza MacDonald both independently corroborated this information.)

When asked about these plans, Microsoft and Oculus representatives did not provide comment.

The two consoles form part of a wider Microsoft strategy, codenamed “Project Helix” according to one source, to converge Xbox and Windows. For a while now Microsoft has been clear that they want their two prestige brands to work together, as they’ve announced big new exclusives like Halo Wars 2 and Sea of Thieves for both Xbox One and PC. Developer sources have told us that Microsoft’s new mandate is to release future games–including the flagship Halo series–on both platforms. The recently-cancelled Fable Legends, which was playable across Windows 10 and Xbox One, was one of the first games to implement this strategy.

In addition, people familiar with Microsoft’s plans have told Keza that the company is moving toward an iterative approach for their consoles, not unlike Apple. Sources say that instead of one hardware revision every five years or so, as has been the case with previous console cycles, Microsoft plans to move towards an incremental model, with more frequent hardware releases and games that are both forwards and backwards compatible across both Windows 10 and different Xbox models.

In March, Xbox boss Phil Spencer dropped some hints about this new approach, telling journalists that he’d like to see consoles take a PC-like evolution. “I look at the ecosystem that a console sits in and I think that it should have the capability of more iteration on hardware capability,” he said. A few days later, he elaborated. “What I’m saying is as hardware innovations happen we want to be able to embrace those in the console space, and make those available and maybe not have to wait seven or eight years for things to happen.”

Of course, Microsoft is no stranger to changing their high-level hardware plans, as we saw in 2013, when the company reversed course on an always-online Xbox One. With Microsoft, anything can change at any time. We hear that the folks at Xbox have yet to finalize the specs for 2017’s Scorpio, although they briefed third-party publishers on the device during a secret event last week, according to a source.

Development sources raised the concern that although the Scorpio model will be capable of supporting 4K resolution thanks to its GPU upgrade, as of right now there is no planned upgrade to the console’s I/O transfer speed–the speed at which the console can transfer assets from a disc or hard drive to its memory. This could mean long loading times for games specifically designed to support 4K, due to their larger assets.

Two months ago, Kotaku broke the news that Sony is preparing an upgraded version of their PS4, which is code-named Neo and will also have a more powerful GPU. Although Sony has not yet confirmed the existence of that device, other news outlets have come forth to corroborate details. We’ll likely hear more from both first parties next month at their respective E3 press conferences. Microsoft’s event is Monday, June 13 at 12:30pm Eastern. Sony’s is that night at 9pm Eastern.

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Project Scorpio is a 4K-capable, VR-ready Xbox One launching next fall

'When it ships it will be the most powerful console ever built.'

The next major addition to the Xbox family is coming next year. Today at E3 in Los Angeles Microsoft officially revealed the long-rumored Project Scorpio, an enhanced version of the Xbox One that's capable of running 4K-native games, and which will also support virtual reality experiences and feature a hefty six teraflops of power. According to Xbox chief Phil Spencer, Microsoft views the new device as much more than a simple refresh."

The important thing for Scorpio is that it's a dramatic step up for us in terms of hardware capability," he told The Verge in an interview last week. "Because as we saw 4K gaming and really high-end VR taking off in the PC space, we wanted to be able to bring that to console. Project Scorpio is actually an Xbox One that can natively run games in 4K and is built with the hardware capabilities to support the high-end VR that you see happening in the PC space today... when it ships it will be the most powerful console ever built."

All models of the Xbox One will be able to play the same library of games, and that includes Scorpio, the original Xbox One, and the just-announced Xbox One S. On Scorpio, though, many of those games will feature improvements because of the more powerful hardware. Spencer cites Halo 5 as an example. While the game is capable of running at 1080p and 60 frames per second on the Xbox One, often the resolution drops in order to maintain a solid framerate. On Scorpio that won't be the case. "When a game like that runs on Scorpio," says Spencer, "it's going to run at maximum resolution the whole time."

As for VR, while previous reports claimed Microsoft was working with Oculus on bringing virtual reality to its home console, the company says it currently doesn't have a partner set — or at least one that it's willing to reveal just yet. "We're not ready to announce something right now, but you can imagine at the price point of Scorpio — which we haven't actually said, but think about consoles and where they live in terms of price point — having something at six teraflops that will get millions of people buying it is very attractive to some of the VR companies that are out there already, and we've architected it such that something will be able to plug right in and work," Spencer says.

It's unusual to announce a game console so early — Project Scorpio is still a codename, after all, and we don't even know what it will look like — and on the surface the reveal appears to be a response to Sony, which already has PlayStation VR launching this year and revealed last week that it was working on a similar upgrade to the PS4. And while that may be part of the reason, Spencer says that the early announcement was also made in an attempt to be more transparent with consumers.

"It's crazy to announce something this early," he admits. "But when I put myself in the shoes of our customer, I want to be able to make a choice on what console I want to buy with as much information as possible. We want to give you the information to make that decision. We also want to go talk to the developers that are out there today, that are building games for next holiday, and say here's what you're going to have at your disposal on the console side."

No specific release date has been revealed, but Project Scorpio is expected to launch sometime next fall.

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Microsoft is cutting the price of its Xbox One console to $249. The new price marks the third price cut in less than two months, ahead of the new Xbox One S launch on August 2nd. 500GB versions of the Xbox One are now $249, and this includes bundles with games like Gears of War: Ultimate Edition, Quantum Break, Forza Motorsport 6, Rise of the Tomb Raider, and Rare Replay.

Retailers like Best Buy and Amazon will be selling Microsoft's Xbox One console at the new $249 price point immediately, and the software giant says the consoles will be available at $249 "while supplies last." Microsoft's aggressive Xbox One pricing follows a sales gap between its console and Sony's PlayStation 4. Sony has sold more than 40 million PS4s, but it's not clear exactly how many Xbox Ones have been sold as Microsoft hasn't provided sales figures for quite some time. EA previously revealed Microsoft had sold 19 million Xbox One consoles back in January.

Microsoft's Xbox One price drops over the past few months have all had end dates, but this latest price drop appears to signal a clearing of inventory ahead of the Xbox One S release on August 2nd. Microsoft's updated console is 40 percent smaller, and the redesigned hardware has been widely praised. With a new Xbox "Scorpio" console due next year, it's hard to imagine that Microsoft will continue manufacturing the original Xbox One hardware once stocks have diminished.

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