Sources at Kotaku, which were later independently verified at Polygon, report that Microsoft has plans to release a cheaper slimmer model of the Xbox One by the end of the year, and a newer, more powerful model set to release next year. The Xbox One Slim is said to have a two terabyte hard drive and will be announced at E3 next month.

Microsoft’s upgraded Xbox One, codenamed Scorpio, but internally called the “Xbox One-Two”, is set to have an upgraded GPU and Polygon reports that Scorpio will be running at six teraflops, a measure of a console/PC’s performance. Which is higher than Sony’s Neo is projected to have, coming in at 4.14 teraflops.

Regardless of which one has more powerful, both of these consoles will have way more power than their predecessors with the Xbox One and PS4 reaching 1.32 and 1.84 respectively. You can see the actual graph of the numbers over at Polygon.

Sources also say that Scorpio will be technically capable of running the Oculus Rift. Whether “technically” in this case means it can theoretically run the Rift or that the hardware can run it is unclear.

While the upgraded GPU will allow for Scorpio to run games at 4K sources at Kotaku say there are currently no plans to upgrade the console’s I/O transfer speed. The I/O transfer speed is how fast the console can read assets of the game’s disc, meaning that users could see longer load times due to the large size of the assets.

Both the Slim and Scorpio are reportedly part of Microsoft’s “Project Helix” which is their plan to integrate Windows 10 and Xbox into one universal platform. We’ve already seen the first steps of this plan with the release of Gears of War: Ultimate Edition on Windows 10 and Xbox One and the similar release of Remedy’s Quantum Break.

According to Polygon, Head of Xbox Phil Spencer hinted at a potential mid-generation upgrade to the console at the Xbox Spring Showcase when he said that users could see a PC-like system with new consoles; where players would have to option to purchase upgrades for the console.

We can effectively feel a little bit more like we see on PC, where I can still go back and run my old Doom and Quake games that I used to play years ago but I can still see the best 4K games come out and my library is always with me.

Later Spencer backtracked somewhat when talking to Game Informer saying that he would rather release something big instead.

I’m not a big fan of Xbox One and a half. If we’re going to move forward, I want to move forward in big numbers… If we’re going to go forward with anything, like I said, I want it to be a really substantial change for people – an upgrade.

First Sony, now their competitor Microsoft. It’s starting to look like the entire industry is moving toward a more iterative type of console development. The model has worked well for PC users, but only time will tell if console users will be as receptive to the change.