According to a report on The Verge, Microsoft have new plans for an alternative Xbox console which will focus on media and entertainment rather than video games.
It’s no secret that Microsoft have been pursuing a casual audience who are interested in using their Xbox as a media centre rather than as a game console, and the announcement of a new TV service and casual console may be the result of that. This new service is a low-cost alternative to the supposed next-gen Xbox and will offer those core entertainment services as well as some casual games. This doesn’t change their plans to release a full gaming console for their hardcore audience as well.
There were rumours that Microsoft were developing two consoles instead of one for the next generation earlier in this year, with the idea that one of those consoles would see use as an entertainment centre rather than as a gaming console, and this report seems to confirm those rumours.