Microsoft may be releasing a new video games console, codenamed Scorpio, for release in 2017, according to several gaming news websites.
The move by Microsoft follows a similar decision by Sony to release an upgraded version of the PlayStation 4 called the NEO.
Microsoft had not responded to requests for comment at the time of writing.
Although the PlayStation 4 and the Xbox One were only released late in 2013, Sony and Microsoft have previously sold improved versions of their consoles during a current product's lifestyle.
This strategy has been used to boost sales and reduce costs by using cheaper or more efficient components, according to Piers Harding-Rolls, director and head of games research at IHS Technology.