While Microsoft is rumored to be planning two new "Xbox TV" streaming devices at E3, it appears a slimmer and smaller Xbox One will be unveiled too. References to a new Xbox One wireless chip were discovered last month, and now Kotaku claims Microsoft will release a "cheaper, small Xbox One" later this year. The updated Xbox One is rumored to include a larger 2TB hard drive. Sources familiar with Microsoft's Xbox plans tell The Verge that the refreshed Xbox One will be 40 percent smaller than the current model, and will likely include 4K video support.
Microsoft is also reportedly planning a larger update to the Xbox One next year. Codenamed Scorpio, Kotaku claims the new console will have a more powerful GPU to support 4K gaming, and that "it will also be technically capable of supporting the Oculus Rift." Microsoft is reportedly pursuing a partnership with Oculus, but the details seem vague and it's not clear if this will mean native support of Oculus Rift on the new Xbox One or the previously announced game streaming to the VR headset.
Microsoft's new consoles are part of what's described as "Project Helix," to converge Xbox and Windows 10 gaming. Microsoft is expected to talk more about part of its efforts towards this at E3 next month, and announce the smaller Xbox One console. The Verge will be covering Microsoft's E3 event live at 12:30PM ET / 9:30AM PT on June 13th.