Microsoft are working on an incremental upgrade for the Xbox One that is reportedly four times faster than what's currently on offer.
Not to be outdone by Sony, Microsoft is reportedly working on its own incremental upgrade to the Xbox One. Sources close to Polygon have claimed that the new console, codenamed "Scorpio" will be an "Xbox 1.5" of sorts - four times faster than the current Xbox One, and capable of supporting the Occulus Rift. It will reportedly launch some time in 2017.
The Xbox One is believed to operate a peak target of 1.32 teraflops, compared to the 1.84 teraflop performance numbers attributed to the PS4. Scorpio is targetting 6 teraflops, which even puts it above the 4.14 teraflops that the PS4.5 is reported to operate at.
While this does make the device technically capable of supporting the Rift, Polygon's sources state that Microsoft's relationship with Oculus has not changed since it was announced last summer. The new console will work just like the PS4.5 - supporting both Xbox One games, as well as new games made specifically for the upgraded hardware.
Additionally, Microsoft is working on a compact redesign of the Xbox One, which we should see released this year. The slimmed-down console will also come with a redesigned controller.
These reports have been corroborated by separate sources from both Kotaku and The Verge, which does add a bit more legitimacy to them. Nonetheless, Microsoft is keeping its mouth shut on this one, so it's still a rumor for now.