Update: We are going to update our previous information. We would like to clarify the Xbox Mini function for avoiding any misunderstood about the new machine (below).
Microsoft is working hard in its new strategy for the next years. The company wants to expand its Xbox brand with two new Xbox. One would be next-gen, the other one would be a new redesign for Xbox 360. Take in mind the Wii Mini, MS would like to offer something similar to Nintendo. This cheap model would be focused as a set top box product, although you will be able to load games too, but the games should be load directly from the HDD. This Xbox wouldn’t have disc drive.
The “Xbox Mini” is not a 360 add-on, it is a stand alone product that contains Xbox 360 functions for gaming, and alone it is meant to compete with Apple TV. Since it is likely it will not have a disc drive, it is being designed with “always online” in mind, and with internet being required for Live functions. Xbox 360 Games can be played on it by purchasing Games on Demand on Xbox Live (for new purchases) or if already purchased, simply download it. This also applies to music and movies. To further clarify, the Durango will also have these (TV) functions, just with next-genration gaming hardware instead of Xbox 360 at a higher price.
When used with Durango, it offers connectivity with it for backwards compatibility with both disc based and On Demand games, and it’s no more different than what Sony will be doing with Gaikai for playing PS3 games on PS4, only with Xbox it will be done locally and not through the cloud. You can control the Xbox Mini under a single interface and not have to worry about switching between devices in a single display input.
These connectivity functions cannot work with existing Xbox 360 units due to the difference in external interface. The Xbox Mini was designed for this along side Durango.
Microsoft expands its Xbox brand
Getting to the point there are going to be two console as part of the redesigned “Xbox Line” of products. A repackaged and reoriented Xbox 360 unit and the new “Durango” gaming console, both designed to compete with more than Sony in gaming, but against Apple as well.
When the Durango (game machine) launches, it will not support backwards compatibility for 360 games out of the box. Instead, this functionality will come from the other unit that will be networked with the Durango to provide this (not unlike the DVD add-on for the original Xbox).
The purpose of the smaller Xbox unit is to compete with Apple TV, but also provides XBLA and 360 game support which will give it an edge over Apple TV. The rumors of “always online required” comes from the smaller Xbox unit which may not have a disc drive and like Apple TV it would require a network connection and internet to provide any real functionality. It may be possible they will design both consoles to be stackable.
Durango itself will also always be online like any other device (correct with rumors), but it will not be a requirement to play local content and it will not prevent playing used games. Putting in an Xbox 360 disc into Durango will prompt the user to attach the supporting device that is sold separately. By separating the two devices and their functions it will ensure price competitiveness for both pieces of hardware. Microsoft’s delay in announcing these products from April goes more inline with not having a physical set of devices to show (among specification updates), which should be ready by May or June when this information is officially released.
The price goal of the smaller Xbox is $149 or lower and it is likely to not have a disc drive and would require a network connection. Durango will be priced competitively according to PS4’s price.
A different department within Xbox handles Kinect hardware and software. The focus was more on developing and networking both consoles with Kinect more of an after thought at that point, considering dealing with it would be less of an issue even with hardware changes to the main console hardware. Kinect isn’t the primary focus.
The development kits required several pieces of hardware as to combine all “potential” hardware which may or may not be required to work with each other, which also includes the potential for any or all devices to required a network connection, which is where most of the “required” rumors are coming from.