The long-running, controversial rumor that Microsoft's Xbox 360 successor would demand an internet connection for all aspects of its functionality has finally been put to rest. Ars Technica is today reporting that an internal Microsoft memo — which it claims was sent to all employees working on the next-gen console — has dismissed the 'always-on' mandate. Referring to the hardware by its codename Durango, Microsoft reportedly wrote, "There are a number of scenarios that our users expect to work without an Internet connection, and those should 'just work' regardless of their current connection status. Those include, but are not limited to: playing a Blu-ray disc, watching live TV, and yes playing a single player game."

With that one, suspiciously informative line, the company has confirmed two major features of the upcoming Xbox: it will utilize Blu-ray optical media and can also double as a cable set-top box. Though it stops short of mentioning an HDMI input, Microsoft's tidbits line up nicely with what we reported early last month. The Xbox 360 never quite made good on its live TV potential, but it seems that Redmond is determined to get it right this time. We'll be hearing much more about the next-generation Xbox at its public unveiling on May 21st.

Thanks, scrapplejoe!