Rumors surfaced today claiming that Microsoft is working on a set-top box capable of running Xbox entertainment apps as well as casual games.
Dubbed 'Xbox TV', the set is thought to be part of a two-pronged strategy for Microsoft's next generation tech that seeks to widen the audience of living room gamers without sacrificing hardcore performance for the dedicated console.
According to The Verge the device should be announced alongside the next generation Xbox in 2013 with a release in time for the holidays.
Sources say Xbox TV runs on the core components of Windows 8, which makes it likely that if the device exists, it will be compatible with games designed for Windows tablets.
Microsoft is also reportedly considering a deal with manufacturers who could integrate the device into a TV set.
Microsoft was evasive when asked for comment, saying only that they had found new ways of extending the console lifecycle through the Kinect, and would continue to "defy the lifecycle convention".