So i saw this interesting topic brought up else where so i copied the info below...

Essentially, the concept/speculation is that Microsoft is planning to release two separate, completely different Xbox branded products next generation, each of which are roughly as detailed below.

Product 1: The Xbox Set Top Box
-Called something like Xbox TV or Xbox Loop.
-Bundled with Kinect, but may not have a regular Xbox controller.
-Based around the concept of Kinect powered home entertainment, focusing heavily on things like Netflix, movies, music, and sports.
-Also plays Kinect only games and applications targeted at casual users. Note: These would have to be made for this system, not emulated.
-Does not have an optical drive or a hard drive, but does have a usable amount of flash storage.
-Is based around an ARM architecture with some specialized co-processors to help Kinect functionality/games/apps.
-Does not play Xbox 360 games and will not play Xbox 720 games unless they're iOS-esque universal apps.
-The goal of this product is to be an all in one home entertainment setup for casual users and help Microsoft take over the living room.
-Designed to compete with products like the Wii and Apple TV.
-Unveiled at a consumer electronics focused event like CES.
-Costs around $200 or less.
-Releasing Fall 2012.
-Would be compatible with Kinect 2, which isn't compatible with the Xbox 360.
Supporting Rumors:
1.) Digital Foundry's two SKU rumor, one without an optical drive, hard drive, or Xbox 360 game compatibility, but focuses on Kinect.
2.) MSNerd Xbox Loop description: ARM based device, smaller and cheaper than Xbox 360.
3.) This Week In Tech: New Xbox releasing at the end of 2012, announced around CES, has Apple like integration with Windows 8 and Windows Phone 8.
4.) Kinect 2 is a lot more advanced, is not compatible with Xbox 360, but is bundled with the next Xbox.

Product 2: The Xbox 3
-Called something that makes it clear it is the traditional successor to the Xbox 360.
-May or may not be bundled with Kinect, but definitely has a dual analog stick controller.
-Focused on the core gaming market.
-Aims to compete with the PlayStation 4.
-Has a more traditional, high powered hardware architecture such as an IBM Power7 CPU and a DX11 AMD GPU.
-Has an optical drive and a hard drive.
-Unveiled at an event like E3 2012/E3 2013 or some kind of MTV TV special.
-Costs around $400 for the base model, possibly has a more expensive Elite SKU.
-Releasing Fall 2013 or Early 2014.
Supporting Rumors:
1.) Digital Foundry's two SKU rumor, one without an optical drive, hard drive, or Xbox 360 game compatibility, but focuses on Kinect.
2.) CliffyB: Expect to see things related to next gen around 2014.
3.) Develop: Xbox Next launching in Fall 2013, possibly Early 2014.
4.) Eurogamer: Next Xbox releasing in Fall 2013.

Why would Microsoft ever do this?
The answer to this is essentially that it lets them release a really cheap Xbox/Kinect product as a home entertainment device without having to impact the hardware power of their core targeted system. Microsoft has recently had a lot of success in both the casual and core domains, but these domains often have very different, opposing demands that make it hard to launch a new product that immediately satisfies both audiences. Trying to appease both audiences runs the risk of creating a product that doesn't really satisfy either, and releasing a product that only satisfies one audience means they run a high risk of losing the other audience to one of their competitors.

Edit: How Does This Interact With Windows 8?
Microsoft currently has a Windows 8 marketplace planned that sells applications that run on Windows 8, Windows 8 tablets, Windows 8 ARM devices, and Windows 8 phones. Given that there is now a commercial SDK for Kinect coming out, this would allow Microsoft to let developers sell Kinect apps for the new Xbox TV system. Since the proposed Xbox TV system runs on an ARM architecture, it would make this process significantly easier since Windows 8 is currently only built to handle ARM and x86, neither of which the Xbox 360 uses. This also helps extend the Windows 8 ecosystem to the TV, which is something that is current unaddressed, but judging by their moves with the Xbox 360, Microsoft is very interested in.

Bonus: It explains most of the rumor confusion.
A benefit of this situation is that it explains almost all of the recent rumor confusion. Recently we have heard frequent rumors of a new Xbox in 2012, but most of those rumors have been coming from consumer electronics focused websites like MSNerd and This Week In Tech. On the other hand, we have heard a lot about a new Xbox in late 2013/early 2014, but these rumors have primarily come from gaming websites like Eurogamer or gaming industry figures like CliffyB. If there are two devices, both of these rumors can be true, and the reason people are getting confused is because each side thinks that only one product exists, so information about one product is perceived as conflicting information about the other.


So....What do you think?