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According to sources close to Microsoft's base of operations in Redmond, the company is apparently building a "set-top Xbox" as an effort to have a low cost alternative for the next generation console. It is said that this set-top box is "always on", enabling a quick boot-up and access to the variety of entertainment services and games.
Positioned as a competitor to Apple TV and similar competitors, this lower end next Gen Xbox will be part of the supposed planned "two-SKU" strategy for Microsoft. This offers consumers a choice between the Xbox TV box, or the full next-gen console. According to reports, both are reported to be unveiled in 2013, with a launch scheduled for pre-Holiday 2013. Xbox TV will run on core components of Windows 8, with casual games available. Kinect 2.0 could likely also factor in with both SKU's of this console.