Well into the third year of the current console cycle, there's an established hierarchy, with Sony's PS4 comfortably at the top of the food chain. After E3 2016, the console race is more interesting than ever as there are at least three new ones launching by the end of 2017. With Sony confirming the PS4K, or NEO, before E3 2016 but not providing new details, Microsoft took the opportunity to reveal two new consoles, including the powerful Project Scorpio.

Microsoft won the last generation with the Xbox 360, but its Xbox One is a very distant second to PlayStation 4. Whereas Sony helpfully provided sales updates, the latest of which was to celebrate over 40 million PS4 consoles sold, Microsoft has not provided Xbox One sales figures. There are an estimated 20 million Xbox One consoles sold, based on comments made by game publisher EA's chief financial officer and analyst projections. That number puts the Xbox One comfortably in second place, but Microsoft does not want to settle for a silver medal. At its press conference Monday at the Electronic Entertainment Expo 2016 in Los Angeles, Microsoft revealed both the Xbox One S and Project Scorpio. Xbox One S serves as a console refresh while Project Scorpio is a totally new system.

Xbox One S

This won't replace the Xbox One, so the 20 million players won't feel cheated by the introduction of the Xbox One S. The console is 40 percent smaller than the original, with a price of $299 for the 500GB version and an August release date. There's a 2TB launch edition Xbox One S for $399 and a 1TB Xbox One S for $349. The Xbox One S supports UHD Blu-ray playback along with 4K and Ultra HD streaming video from Netflix, Amazon Video and others.

But aside from being a better-looking console and offering 4K resolution support, the Xbox One S will not receive a performance boost, according to Eurogamer. The console does have High Dynamic Range support, so games will have richer colors and better contrast between light and dark on the Xbox One S, but there will be no improvements to a game's frame rate or resolution.

To reduce the overall size of the Xbox One S, Microsoft eliminated the dedicated Kinect port on the console, but the device is supported via a USB adapter. There's also a vertical stand for $19.99.

The other big change that comes with the Xbox One S is a new wireless controller with a textured grip, increased wireless range and Bluetooth support. The thumbsticks have also been redesigned for improved comfort and performance, according to Microsoft. Players can purchase the redesigned wireless controller for $59.99. 

For gamers who have been on the fence about purchasing a new console, the Xbox One S is a solid option as it provides many improvements to the original console at the same price, although it's likely the Xbox One will carry a bit of a discount.

There was another big announcement at Microsoft's Xbox E3 2016 press conference that gives players a more powerful option. On paper, Project Scorpio is more powerful than the rumored Sony NEO, but there's always a concern about the price.

Project Scorpio

Rumored ahead of E3 2016, Microsoft confirmed the existence of Project Scorpio to close out its press conference. There was plenty of talk about teraflops, but that boils down to a next-generation leap for consoles. Project Scorpio is a successor to the Xbox One and will be the most powerful console on the market when it is released in time for the 2017 holiday season, according to Microsoft.

Project Scorpio boasts a 6 teraflop GPU, which is way faster than the 1.84 teraflop GPU found within the PS4 and the 1.31 GPU within the Xbox One. For developers, that means they can create better graphics, a higher frame rate, more complex interactions within the game and larger worlds. An 8-core CPU and 320GB/s of memory bandwidth adds even more muscle to Microsoft's new console.

With the introduction of Project Scorpio at E3 2016, the next console cycle may have arrived sooner than expected. Instead of the seven-year life cycle of a console, players could see more midcycle refreshes to match current technological advancements.

That's how Xbox chief Phil Spencer explained that Project Scorpio and the Xbox One S serve different consumers. Project Scorpio is all about 4K gaming, so that's the console for players who have a 4K TV and don't mind paying a higher price for the latest technology, Spencer told Eurogamer. Project Scorpio is designed to support a high-fidelity VR experience, but Microsoft did not specify a headset support for the console. The Xbox One S will be for people who are curious about 4K resolution, but have 1080p HDTV.  

As part of its push for a Universal Windows Platform, all games will be compatible across the Xbox console family with no Project Scorpio exclusives. Players could keep their Xbox One or Xbox One S after upgrading to Project Scorpio without losing their progress.