Microsoft is working on a next-generation console which will be used purely for game streaming, Thurrott reported.
The new console will be a power-efficient device with a lower price tag than traditional consoles, and will be designed for streaming video games over the Internet.
Controller input, image processing, and collision detection will reportedly be handled on the machine itself, greatly improving latency while gaming.
Microsoft will reportedly use its Azure cloud platform to handle the heavier side of the video game rendering, with users paying a monthly fee to access the game streaming service.
The report stated that Microsoft will also launch a new traditional Xbox console alongside the cheaper device, which will function similarly to current-generation consoles – rendering video games locally without the need for a connection to a cloud service.