Where one will be a traditional console in that it will contain fancy new graphics hardware and processing power while the other will be a streaming only device - aiming to offer the same fidelity but cheaper. As long as the user has access to fast, unlimited internet.
According to the new report over at Thurrott
, both consoles are going by code-name of Scarlett with the streaming service/version referred to as Scarlett Cloud internally. Apparently the new Xbox is being designed with features to reduce latency and input lag, off-setting some of the computational cloud power locally for increased performance. This means that a version or elements of a game will run on the local machine making it costlier than a standard streaming device but cheaper than a full-priced console.
Apparently both versions of the Xbox Scarlett, including the traditional console made-up of tech bits, will launch in 2020 with all games playable across both devices. Naturally, for a market like Australia - even though a lot of us have access to nearby Microsoft Azure servers and data centers, it would be hard to justify the gamble of choosing a streaming-only console.
It's certainly a bold direction to take, and one that if not dominant in the next generation of hardware will certainly become the norm sometime in the future.