Microsoft is an ARM licensee so it is no surprise to hear rumours that the company plans to use a processor based on ARM's architecture custom built by its engineers in its next generation console, which has been commonly labelled as the Xbox 720, Loop or the Xbox Next.
In a way, Microsoft would be following in the footsteps of Apple who did the same with its A-series SoCs tied in with iOS. Microsoft is said to be doing the same with the Windows 9 Core.
According to MSNerd, the system on chip will come with multiple dedicated cores for graphics, artificial intelligence, physics, sound, networking, encryption and sensors, and is designed by Microsoft and two other partners.
Nvidia could be one of them given that it has worked closely with Microsoft on the Xbox and the Xbox 360 and is currently an ARM licensee as well. XbitLabs reckons that Microsoft could hire AMD to make sure that backwards compatibility wouldn't be lost, although we envisage that the Xbox 720 may be a hybrid between Onlive and current consoles.
Microsoft is expected to announce the console in 2013. Windows 9, we believe could well be the first unified platform by Microsoft to serve both mobiles and desktops, which brings an interesting question. Could the Xbox 720 actually be a smartphone?