According to The Verge, Microsoft plans to release a low cost Xbox set-top box in 2013 that focuses on the Xbox 360's core entertainment services. It is expected to be part of a two-pronged strategy for the next generation of the Xbox, likely to be paired with a more powerful Xbox designed around gaming. The system will also support "casual" gaming titles and not the core offerings of a dedicated console.
And it will look exactly like this! (Maybe.)
The set-top box is expected to be part of Microsoft's efforts to make the architecture of the next Xbox scalable for a variety of different devices, such as consoles, phones, and televisions.
Microsoft, in response to this report, stated the following:
"Xbox 360 has found new ways to extend the console lifecycle by introducing 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."
Source: [The Verge]