Microsoft is playing catch up when it comes to console sales. But it looks like the company doesn’t want to give up on dedicated gaming consoles. According to multiple reports, Microsoft is about to announce a new, slimmer Xbox One around E3 in June, and a more powerful Xbox One next year.

In April 2016, FCC filings showed that Microsoft was working on two new consoles. Kotaku just confirmed this with more details on the company’s plans.

First, Microsoft is going to release a slimmer Xbox One in the coming months. This console should be as powerful as the Xbox One, but as much as 40 percent smaller according to The Verge. While this console should be cheaper, it should also come with a beefy 2TB hard drive.

This would make sense if Microsoft plans to remove the Blu-ray player with this new model. You can expect an announcement next month at E3.

Now, let’s talk about the more important news — Microsoft could be working on a much more powerful Xbox One for next year. Rumor has it that Sony has been working on a PlayStation 4 ‘Neo’ and is going to announce it this Fall. This new PlayStation 4 should be more powerful in order to work with the PlayStation VR headset.

It turns out that Microsoft has similar plans with a new Xbox One codenamed ‘Scorpio’. Like with the PS4 ‘Neo’, Microsoft doesn’t want to alienate existing Xbox One users. All games going forward should be compatible with the Neo, Scorpio and old consoles. Games would just look better on the new ones.

According to Kotaku, the new Xbox One specs are not set in stone just yet. But Polygon has learned that Microsoft is targeting 6 teraflops of GPU power, more than the PlayStation 4 ‘Neo’. Microsoft could be working with Oculus to make its console compatible with the Oculus VR headset.

Both companies are switching to a more iterative approach with performance upgrades every three or four years. Switching to an x86 architecture makes it much easier to make backward compatible consoles as well. So the Xbox One and the PlayStation 4 may have been the last major console releases hitting the market.