Microsoft plans to launch two very different versions of the next Xbox, according to a Digital Foundry report on GamesIndustry.biz.
The first is described as a "pared down machine" to be released as cheaply as possible. It is likened to a set-top box, and will act as a Kinect-themed gaming portal.
The second is a "more fully-featured machine" with optical drive, hard disk and backwards compatibility. This would be aimed at hardcore gamers and released at a higher price-point.
Kinect, Digital Foundry has heard, will be bundled with both SKUs.
Next-generation talk has ramped up in recent weeks, with Edge reporting that the next Xbox will launch late next year.
Digital Foundry believes this is unlikely, however, suggesting a 2013 launch. The console is rumoured to be set for a reveal at E3 2012.
Edge claimed Ubisoft Montreal is currently developing software using "target boxes" - PCs containing off-the-shelf components provided by Microsoft - and that true dev kits will be available before the end of the year.
The report added that a number of other developers also have the target boxes, including a number of EA studios.
French site Xboxygen reported that Microsoft plans to unveil its next console at the CES show in Las Vegas in January 2012.