Whether it will be called Xbox Next, Xbox 720 or Xbox Loop, the next-generation Microsoft gaming console slated to make an appearance in 2013 will reportedly feature a "Zune HD-like" hardware platform: an ARM-based heterogeneous system-on-chip (SoC) with multiple dedicated assistive cores for graphics, AI, physics, sound, networking, encryption and sensors. The SoC will even be custom designed by Microsoft along with two unannounced partners.
In addition to the ARM-based SoC, rumors suggest that the console's operating system will be built around a Windows 9 core. Yet a recent leaked roadmap suggests that Windows 9 won't even go into Developer Preview mode until the BUILD conference in 2013, the same timeframe when Xbox "Loop" is slated to arrive in stores. For that matter, Windows 9 isn't scheduled to enter beta until CES 2014 if Microsoft stays on track. Using a Windows 8 core sounds more likely for the unannounced console to better connect it with Windows Phone 8 devices and Windows 8 PCs.
According to rumors, the next Xbox will rely on the ARM-based architecture in order to make it smaller and cheaper than the current Xbox 360 system, further enabling Kinect adoption. Microsoft may be looking to make it more portable despite previous conceptual designs of the future console, but don't expect the company to remove the optical drive just yet -- physical media is still the preferred method of content delivery.
For years Microsoft has stated that the Xbox 360 console will have a lifespan of up to around 2015, but that never meant the company would hold off on releasing a new console until then. Yet with mobile technology progressing at an accelerated rate and the uncertainty of the gaming industry's immediate future, it's understandable that Nintendo and Microsoft are scrambling to push the console sector into another generation. The Wii U looks to take on a tablet approach while current rumors suggest Microsoft wants something a bit more portable... possibly with 3G connectivity?
As always, take all of this with a grain of salt: nothing is official or set in stone.