Rumor: New Xbox Consoles in the Works

A cheaper, smaller Xbox One may be in the works.

Citing people familiar with the new model's development, Kokatu reports that it will have a 2TB hard drive and could go on sale before the end of the year.

Microsoft is also working on a new flagship Xbox console that will have a more powerful GPU and support for the Oculus Rift virtual reality headset, according to Kokatu, but that model may not arrive before 2017.

The Xbox One is now three years old, and while that may seem like an eternity for most consumer tech products, stretching out the time between major upgrades is par for the course for console manufacturers. Still, whether or not today's rumors are true, it's highly likely that VR support is in Xbox's future, if only to compete with the Sony PlayStation VR, which arrives this fall.

Xbox One did get a software update in January that brought a new Gamerscore leaderboard and improvements for the Home screen and activity feed. At Microsoft's Build developer conference in March, Xbox head Phil Spencer didn't mention any new consoles, but did say that the Xbox will be more closely integrated with Windows going forward.

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On the most basic level, that means Windows 10 features will arrive (or have already arrived) on Xbox, including voice recognition and the Cortana digital assistant. When it comes to the big picture, it could mean that Xbox hardware itself will be updated more frequently, akin to the release schedule of devices like smartphones. 

A Microsoft spokesperson said that the company does not comment on rumors or speculation and declined to elaborate on Kokatu's report. Oculus declined to comment.