I recently grilled someone who has indirect knowledge on whats going on at Microsoft, and they said that all the evidence discussed in other projects (they were not on an Xbox game) is that they are not developing games for a step down console. They have no idea what will make it cheaper, but when I asked initially before discussing the rumors they said they expect it will just be missing a disc drive.
As far as they were concerned, Microsoft is gonna be putting out two identical consoles game wise. Nothing nerfed about it.
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