In late July, two different reports from reputable sources (Thurrott and The Verge) suggested that a next-generation 'streaming Xbox' is in development at Microsoft. This would be a low-powered device designed specifically to be used in conjunction with the cloud gaming platform that we now know to be Project xCloud. Allegedly, it would be in addition to another more powerful Xbox console geared to run games locally, per tradition.

We have now received information regarding the chip that will power this cheap, affordable game console. As you may have read, the AMD Picasso line of APUs has been recently linked to an upcoming Microsoft Surface laptop. However, according to the leaker, Microsoft is really interested in using a semi-custom Picasso chip for the aforementioned next-generation streaming Xbox.

Microsoft is Working on a Second Next-gen Xbox ‘Console’, Reports Claim; Cloudbased for ‘XCloud’ Streaming Service

Reportedly, that's because of the great power consumption to performance ratio of the AMD Picasso APU, which is expected to allow a small form factor for the hardware and crucially to enable Microsoft to keep the price low.

Some 'latency sensitive' calculations will be made locally, but the critical innovation from a technological standpoint will be hardware accelerated deep learning in both the datacenters and the Picasso silicon. This 'cornerstone' has been described by the leaker as a more sophisticated version of Project Brainwave, the deep learning acceleration platform for real-time AI announced last year by Microsoft.

What's interesting is that through deep learning, both the servers and the console will improve over time at predicting the actions of players and henceforth minimizing latency. This would tie nicely into making this streaming Xbox a very accessible console in terms of price, therefore giving the neural network lots of users to learn from. The overall goal at Microsoft is to cut down latency as much as possible, which they believe they'll have the chance to do by optimizing their hardware, software and datacenters.

We already know from the Project xCloud announcement that Microsoft is indeed building custom datacenter hardware to be compatible with Xbox consoles, so that part of the leak definitely checks out.

Kareem Choudhry (Microsoft’s Corporate Vice President of Xbox Software Engineering) - We’ve enabled compatibility with existing and future Xbox games by building out custom hardware for our datacenters that leverages our years of console and platform experience. We’ve architected a new customizable blade that can host the component parts of multiple Xbox One consoles, as well as the associated infrastructure supporting it. We will scale those custom blades in datacenters across Azure regions over time.

Going back to the Ryzen 3000 AMD Picasso APU, the specifications leaked just two days ago via GeekBench. The Ryzen 5 3500U, for instance, comes with four physical cores and eight threads (through multithreading), with a base clock frequency of 2.10 GHz, 2MB of L2 Cache, 4MB of L3 Cache, and 15W of TDP (Thermal Design Power). According to our hardware team, it should include eight Compute Units for a total of 512 stream processors.

AMD Readies Picasso APU – Raven Ridge Successor Based On 12nm Based Zen+ Architecture?

Of course, this does not give us much to go on with regards to the chip Microsoft would use. The leaker stated a semi-customized chip would be used, which was after all the case for all the AMD chips used in PlayStation 4, PlayStation 4 Pro, Xbox One, Xbox One S and Xbox One X consoles. Thus, the specifications may well be very different as needed by Microsoft in this case.

We'll let you know should more details arise on the upcoming streaming Xbox, still unconfirmed by Microsoft but highly likely at this point.