Not only does Microsoft have the for-now-temporary $50 discount on Kinect-less Xbox One consoles and bundles that started yesterday, late last week, news broke that Microsoft is working on the next “generation” of Xbox One consoles that could lead to a permanent price drop. Word on the street is that AMD has developed a smaller processor for use in the Xbox One which could be the precursor to big changes to the Xbox One.

This news comes from the LinkedIn page of an AMD senior manager of system on chip physical design. In an entry on his resume, the man claims to have “successfully planned and executed the first APU for Microsoft’s Xbox One Game Console in 28nm technology and a cost-reduced derivative in 20nm technology.”

The 28nm and 20nm refers to the size of the transistors. By decreasing the size, there are performance gains according to the manufacturer’s website. Taiwan Semiconductor Manufacturing Company says that the 20nm APU will allow for a 30% performance gain or a 25% power usage drop at the same performance. The physical size of the processor is also smaller because of the smaller transistors.

So what does a smaller chip running at lower power mean? Well, the biggest change would be that a smaller CPU using less power to achieve the same performance would be able to run with less cooling. A smaller cooling unit would mean that Microsoft would a smaller chassis for the console.

This would mean less money spent on parts for the console with smaller cooling units, a smaller console shell, smaller boxes and lighter weight for shipping worldwide. While there’s an upfront cost to designing and testing a new console design, it’s not like Microsoft didn’t do that in the last console generation with the soldering issues with the first generation of Xbox 360s.

Of course, there’s still the matter of when or if slim Xbox Ones will launch. The second generation Xbox 360, codenamed the Xbox 360 S, wasn’t launched until almost five years after the console’s launch. From PS3 launch to PS3 Slim was about three years. The PS2 took four years before the PS2 Slim was released. Just because Microsoft is working on an Xbox One Slim doesn’t mean we’ll get it any time soon. There’s also the problem where Taiwan Semiconductor Manufacturing Company’s 20nm transistor manufacturing is currently completely occupied by Apple’s A8 and A8X mobile processors.

With Microsoft looking for a price advantage for them to close the estimate three million unit sales gap that the PlayStation 4 to the Xbox One, we shouldn’t be too surprised that they’re looking for the next way to save money and lower the price. I keep saying how competition means that the consumers win. If both console manufacturers race to low prices, people who haven’t bought a next-gen console yet will win. Good thing I’ve held off for 11 months. I could come out ahead.

Source: Eurogamer/Digital Foundry