Microsoft's next-generation Xbox console, believed to be called Durango, will integrate tightly with a gamer's television and set-top box, similar to how Google TV works.
The Verge has reported that Microsoft's new console will require an always-on internet connection to access streaming services and TV channels.
The feature will apparently work by feeding a cable box signal (such as Virgin Media in the UK) through the Xbox console via HDMI, allowing the console to lay its user interface over the top of the television set - but as cable TV technologies differ from country to country, some features may initially launch as US-only.
"We're told that this is a key part of the next-generation Xbox and that it will go a step further than Google's TV implementation thanks to Microsoft's partnerships with content providers," The Verge said.
"Extended support for various cable services will be rolled out gradually, but the basic functionality will be available at launch."
Further enhancing the new Xbox's claim to take over your television, the console's Kinect sensor will apparently be upgraded to detect the eye movement of viewers, pausing content when you look away or leave the room and playing it again when you next look at the screen.
Separately, the company is also expected to release a cheaper 'Xbox TV' set-top box, which would offer a similar user interface to the regular console, along with access to content from Microsoft and partners like Netflix, but with the ability to play only casual games like Limbo, foregoing the ability to play full titles such as Call of Duty and Halo.
On the same day, Xbox Live developer Eusebius Lai wrote on his LinkedIn profile that he was "working on cool new features for the new Xbox". He said his role included working with the Xbox video index and ways to process DRM (digitally rights managed) content.
Bloomberg sources claimed the Xbox Durango would be dropping the 64-bit PowerPC architecture found in the Xbox 360, in favour of the x86 system used by Sony's upcoming PlayStation 4, and because of this the new console will not play Xbox 360 or original Xbox games.
The sources also said that the console will use AMD's so-called "Jaguar" central processing units, the same that the PlayStation 4's 8-core AMD processor is built around.
Although yet to make an official announcement about the next-generation Xbox, Microsoft is widely believed to be holding a press event on 21 May, and we expect to see both Microsoft and Sony show off more of their consoles at E3 2013 in June.