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I really don't know why they'd want to do this, but there's word that Microsoft wants to make an even cheaper version of the Xbox 360 that will be built around ARM architecture. The exact price point is unclear, but this so-called Xbox Lite could get pegged at the $99-ish range to compete with something like the Apple TV.

The "new" Xbox, according to MS Nerd, is being targeted for a launch in late 2013. It will focus more on Arcade-style games and media apps rather than on hardcore disc-based games. It will be compatible with Kinect, but Microsoft's motion-sensing camera peripheral will likely need to be purchased separately.

But why? Why would you want to do this when the current 4GB Xbox 360 is listed at $199 and oftentimes goes on sale for $129-$149? If they want a $99 Xbox Lite to work with a Kinect, the consumer is still on the hook for over $200, which doesn't make it "price competitive" with an Apple TV, WDTV, or other home theatre media box. I just don't see the point.

In any case, the "true successor to the 360" doesn't seem like it's going to be around until some time later, possibly getting announced at E3 2013 or even 2014. The so-called Xbox 720 or Xbox Next will then be accompanied by an upgraded Kinect in 2015.

Chalk this all up to rumor for now, but hopefully Microsoft will indicate something at E3 2012 in June.

Source: BGR