Microsoft’s upcoming next-generation console, known as Xbox 720 or “Durango,” has received a lot of attention lately due to a report that alleged it may ship with an always-on DRM mechanism.  A blogger by the name of Paul Thurrott is now claiming that the company might have yet another surprise in store for users, a low cost Xbox model codenamed “Stingray.”

SiliconAngle founding editor Mark Rizzn Hopkins discussed the story on this morning’s NewsDesk segment.

Hopkins starts by providing some background on the origin of this latest rumor: Thurrott, who has proven track record of leaking major Microsoft updates, mentioned that Microsoft officials briefed him on the secretive project during a What The Tech Podcast this past Friday. What exactly is Stingray? Hopkins says that it’s a low-cost box that will deliver the secondary services currently available through Xbox 360.  According to Thurrott’s sources, the product will be priced to compete with set-top boxes such as Ruko.

Hopkins explains that the upcoming Xbox 720 will be available for around $500, the same price Sony is expected ask for its competing Playstation 4 console. This may be acceptable for gamers, but consumers who currently use the Xbox 360 as a “Netflix box” will be hesitant to purchase Microsoft’s next generation home entertainment system. This is one of the reasons the company could be working on a more affordable Xbox model.

In the podcast, Thurrot suggested that another motive behind the creation of Stingray is backward compatibility: Microsoft confirmed that the Xbox 720 is based on x86 architecture, which means that the platform will not support games developed for the 360. In theory, a less powerful edition of the console may not be burdened by such a limitation.