The new set-top box would be powered by the Windows 8 operating system
US based software maker Microsoft is planning to develop a new low-cost Xbox TV that could be used for casual gaming with features to access TV and entertainment services which could be a rival to Apple's TV set-top box.
Claimed to be an 'always on' device which gets booted quickly, the new set-top box would be powered by the Windows 8 operating system.
According to Telegraph, Microsoft's new device is aimed at casual consumer who would not be able to pay the complete price for a console, while have a capability to play games on their television amid streaming video and watching films or TV programmes.
With expected arrival in 2013, the new set-top box work is part of the software firm's two-SKU strategy to share out its Xbox Live services across a various devices.
Microsoft spokesman told The Verge that Xbox 360 comes with controller-free experiences with Kinect and re-inventing the console with a new dashboard and new entertainment content partnerships.
"We are always thinking about what is next for our platform and how to continue to defy the lifecycle convention," spokesman said.