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We've been very skeptical about reports claiming the next-generation Xbox would require a persistent Internet connection to play games. Although an updated Xbox roadmap detailed by VGLeaks mostly dispelled that idea, today we're as close as we'll get to putting the rumors to rest short of an official announcement.
Ars Technica reports that an internal Microsoft memo sent to all employees working on the console dismissed the always-online requirement, while also implicitly confirming a couple of rumored features.
"Durango is designed to deliver the future of entertainment while engineered to be tolerant of today's Internet. There are a number of scenarios that our users expect to work without an Internet connection, and those should 'just work' regardless of their current connection status. Those include, but are not limited to: playing a Blu-ray disc, watching live TV, and yes playing a single player game."
The mere existence of the memo suggests there was either a great deal of confusion inside Redmond, likely stemming from development kits that did require connectivity for testing purposes, or a policy change.
Also of note is the mention of Blu-ray and live TV. The first was pretty much expected at this point but the second suggests the next Xbox will indeed double as a set-top box. According to sources cited a month ago by The Verge, the next-generation console can take a cable box signal and pass it through to the TV via HDMI, allowing it to overlay a UI and features on top of an existing TV channel or set-top box.
There were no hints regarding how the console would handle second-hand or borrowed games. Since the next Xbox is expected to install games on its internal hard drive, Ars notes Microsoft could still take a Steam-like approach by requiring a connection to activate games on consoles. That's purely speculation for now, though.
Unsurprisingly, Microsoft declined to comment on the report or the authenticity of the memo, sticking to usual policy with this noncommittal bit of PR: "We're excited to share more about the new generation of games, TV and entertainment on May 21, but have nothing further to share at this time."