The follow-up to the Xbox 360 will boast a massive performance increase in the region of six times what Microsoft's current console can achieve, sources close to the project have told IGN.
The sources have confirmed that mass production of the next-generation Xbox's GPU will begin by the year end, with the part based on the Radeon HD 6670, not the 7000 series as had been previously rumoured.
The HD 6670 boats support for DirectX11, 3D and 1080p HD output to multiple displays. Released last year, the part can be purchased for around £50 in its current desktop PC form.
IGN adds that in real terms, the raw graphics performance of the next Xbox is expected to be six times that of the Xbox 360 and 20 per cent faster than the Wii U.
Development kits featuring finalised specifications should be in the hands of studios by August, IGN concludes.
It's expected that E3 this June will see the first official details of the next consoles from Microsoft and Sony.
The £50 GPU appears an underwhelming choice by Microsoft, especially given that it struggles with the current high-end PC games when pushing the graphics to their max. However, in a dedicated console environment much greater things can be achieved - just look at the likes of Gears of War 3 which is running on an Xbox 360 equipped with a GPU from 2005/6.