A smaller, cheaper version of the Xbox One will release later this year ahead of a "more powerful" Xbox console in 2017, a new report has claimed.
Kotaku claims to have heard from multiple sources that the new 2017 Xbox will feature a "more powerful GPU" and be "technically capable" of supporting VR headset Oculus Rift. It will also support 4K and is currently in development under the codename Scorpio, the report says.
The slim model, meanwhile, is expected to be announced at next month's E3, Kotaku says, and could ship with a larger 2TB hard drive. It remains unclear when the more powerful console will be revealed.
The report follows comments by Xbox boss Phil Spencer earlier this year, who suggested that the company had plans to launch new hardware backward compatible with current Xbox One titles.
"We believe we will see more hardware innovation in the console space than we've ever seen," he said. "We'll see us come out with new hardware capability during a generation and allow the same games to run backwards and forward compatible because we have UWAs (Universal Windows Applications) running on top of UWP (Universal Windows Platforms). It allows us to focus on hardware innovation without invalidating the games that run on that platform.
"We can effectively feel a little bit more like what we see on PC where I can still go back and run my old Quake and Doom games, but then I can also see the best 4K games coming out. Hardware innovation continues and software takes advantage. I don't have to jump generation and lose everything I played before."
Sony, meanwhile, is also rumoured to be working on a more powerful version of its PlayStation 4.