Microsoft will reportedly unveil smaller Xbox One and 2 streaming devices at E3, more powerful console in 2017

We’re still more than two weeks away from E3, but Microsoft’s announcements are already starting to leak. Kotaku is reporting a smaller Xbox One is coming this year, and The Sams Report (Petri executive editor Brad Sams first broke news about the Xbox Elite controller) is talking about two Xbox streaming devices. Both reports, coincidentally published on the same day, also discuss a more powerful Xbox console slated for 2017.

Let’s first focus on what’s coming sooner rather then later. A cheaper and smaller Xbox One is expected to arrive by the end of this year. This compact version will apparently include a larger 2TB hard drive (1TB is the most you can get right now), but it’s main selling point will be a lower price.

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As for the two streaming devices, the first will be similarly sized to Google’s Chromecast and cost about $100, while the second will apparently be larger and closer to the $150-$175 range. The streaming stick will let you access Xbox digital content, including Xbox One games from your console so you can play them on a second TV using Xbox One controllers. The second device will be a standalone offering, and will be able to access universal apps and games from the Windows Store. Full-blown Xbox One games wouldn’t be available without streaming from an Xbox One console, but casual games that Windows 10 users can play would be.

While all of the above is likely to be shown off at E3, we doubt Microsoft will unveil its more powerful Xbox next month. Codenamed Scorpio, this Xbox is supposed to feature a more powerful GPU that can handle 4K resolution. Also on the table is support for the Oculus Rift, though Microsoft is still working on details, which naturally require pursuing a partnership with Facebook’s Oculus. All that being said, keep in mind that Phil Spencer, the head of Microsoft’s Xbox division, has said he is “not a big fan of Xbox One and a half.”

The big picture here is that Microsoft wants to bring Xbox and Windows closer together, as part of a project codenamed Helix. Future games could be released on both platforms. The Xbox interface could one day show up on Windows 10, fueling speculation that future PCs could simply become Xbox consoles, offering an alternative option to buying Xbox hardware. While the console isn’t going away, Microsoft is apparently considering moving towards an incremental model with more frequent hardware releases. Games would have to be forwards and backwards compatible on both Xboxes and Windows 10 computers.

Keep in mind that none of this is final until it is announced. And even then, the Xbox team has changed directions many times in the past.

Microsoft’s E3 event begins on June 13 at 9:30 a.m. Pacific/12:30 p.m. Eastern.