Microsoft is speculated to be developing two new video gaming consoles. One is said to be a slimmer version of the current Xbox One, which is rumored to be released this year, while the other, believed to be the Xbox Two, is expected to be unveiled next year.

Polygon reported that a relatively smaller and cheaper Xbox One is being developed and is said to be launching this August. It is speculated to be 40 percent smaller than the current model and will be the smallest Xbox so far.

It was mentioned that the upcoming device may be able to handle 4K videos and will still handle gaming output via the same scaling technology, similar to current game console.  It may also come with a redesigned controller and could also be equipped with a larger hard drive, rumored to have a 2TB capacity.

Previously, it was also reported that the slim Xbox One will not contain any optical drive, hence the smaller profile, and will also come with an upgraded wireless module.

Meanwhile, Kotaku reported that the 2017 Xbox One version is known internally as Scorpio and according to three different sources, it will also have an upgraded GPU, which is capable of supporting 4K video and gaming resolutions and powerful enough to drive the Oculus Rift. It was also mentioned that Microsoft is interested in partnering with the VR company.

In terms of raw power, the upcoming device is speculated to be capable of having 6 teraflops, which is way more than what the current Xbox One can offer, a mere 1.32 teraflops. If this is true, the Xbox One for 2017 or Xbox Two, will also be more powerful than the rumored PlayStation Neo, estimated to have 4.14 teraflops.

Additionally, it is believed that the two consoles are a part of a bigger plan that the company has developed in order to combine the Windows 10 and Xbox ecosystem, which is dubbed "Project Helix." Microsoft has reportedly announced "Halo Wars 2" and "Sea of Thieves" to be both available on the said platforms.

The console community is looking forward to the Electronic Entertainment Expo 2016 for announcements from Microsoft regarding these consoles.