Microsoft (or at least some of its recent employees) has been getting a lot of flack due to reports and speculation that the upcoming next-generation Xbox console will feature some kind of "always-online" digital rights management (DRM) requirement. But a new report from VGLeaks now seeks to debunk these rumors entirely.

The website claims that the DRM rumors actually have to do with another Xbox console Microsoft plans to launch simultaneously with its next-generation console. This so-called "Xbox Mini" would feature many of the most contentious features that gamers and game journalists have suggested might show up in Microsoft's upcoming consoles such as an always-online requirement, backwards compatibility with Xbox 360 games, and no disc drive.

A disc-less Xbox was first reported by the British gaming website MCV early last month, but it appeared to be all but debunked as a rumor. The existence of such a device would confirm another report by veteran Microsoft watcher Paul Thurrot that claimed Microsoft has been working on at least two other versions of a new console, both of which try to pare down both the cost and size of the Xbox to create a smaller, leaner entertainment device to compete with something like Apple TV.

This would also be in line with Microsoft's own strategy for the Xbox 360 and new Xbox. The company has already released a $99 version of the Xbox 360 late last year — the one catch being that it came with a two-year contract that ended up costing as much (if not more) than other premium versions of the console. An always-online requirement would be a cunning way to sell a similar device without irking as many consumers wary of signing contracts with their video game consoles. And it also showed a clear interest in rebranding the Xbox as an all-purpose home entertainment device when it hired veteran Hollywood producer Nancy Tellem to form a new studio dedicated to television-style programming.

The two new Xbox consoles, VGLeaks claims, are designed for tandem use — connected with a single controller and display, the Mini will give users access to entertainment apps and 360 games downloaded through Xbox Live Arcade (XBLA), while the next-gen Xbox (also known by its code-name "Durango") will offer the lion's share of new content. Pre-owned 360 games, however, would also presumably require the Mini's support. If the Xbox Mini does indeed exist and doesn't contain a disc drive, therefore, Microsoft will essentially be offering gamers backwards-compatibility at the price of an additional console.

Microsoft, as always, is not commenting on rumors and speculation.