Windows Live general manager Brian Hall acknowledged the as-yet unnamed console during The Verge's podcast last week.
"We did this -- we've had Hotmail for -- and operated Hotmail for about 16 years. We obviously have Exchange, and Outlook that people use at work," Hall said. "We just decided it was time to do something new and bring the best from each of those, put them together and release it right in time for the new wave of products that we have coming out with Windows 8, with the new version of Office, with the new Windows Phone and the new Xbox."
The "Durango" as its known currently, is rumored to support Blu-Ray technology (a definite heartbreaker for Microsoft, as Blu-Ray tech is currently owned by Sony, a competitor in the console market), a built-in Kinect sensor (likely upgraded, considering the Kinect has grown by leaps and bounds since its initial release), as well as some form of software against used games, which is sure to kill GameStop's business, if all next-gen consoles use this feature.
The console race has officially begun anew. Sony's next-gen system is on the horizon, while Nintendo's WiiU system launches in the fourth quarter of 2012. Sony and Microsoft's systems are going to pack more power in their consoles than Nintendo's, which is rumored to be a bit more powerful than the current-gen systems. John Carmack, creator of the "Doom" franchise for id Software, had the following to say about Microsoft's next console (via PluggedIn): "It'll be another 10 times as powerful as this generation. I'd be surprised if that doesn't last over a decade before people wind up saying, well, we've really tapped out everything you could possibly do on there."