Microsoft is reportedly developing a new console, code-named the Xbox Two, to compete with the next-generation gaming consoles, namely Sony's PlayStation 4.5 NEO and Nintendo's NX.

While the Xbox Two has not yet been officially announced, Xbox head Phil Spencer has briefly talked about the company's plans for an upgraded console.

"I'm not a big fan of Xbox One and a half. If we're going to move forward, I want to move forward in big numbers. For us, our box is doing well. It performs, its reliable, the servers are doing well. If we're going to move forward with anything, like I said, I want it to be a really substantial change for people — an upgrade," Spencer revealed.

Rumors suggest that the Xbox Two's upgraded features will include support for 4K gaming. It will also have the backward compatibility feature so that game titles from previous console generations can still be played. Given the boom in the virtual reality landscape, Microsoft is also rumored to incorporate VR technologies into their new gaming console.

The Xbox Two may also come with increased and improved Windows 10 integration. Microsoft has already taken the first steps in developing a universal platform for all Microsoft products. The Xbox Two may come with a more streamlined user interface that will make gaming, streaming, and downloading easier.

In terms of release dates, reports become a little more vague. However, possible release dates could be deduced based on Microsoft's release history.

The original Xbox was released in November 2001 followed by the Xbox 360, which was released three years later (May 2005). Then, it took Microsoft eight years before releasing the Xbox One last November 2013.

Using this pattern, it is possible that the Xbox Two could arrive later this year or by early 2017 at the earliest. This release date would also allow Microsoft to compete with the new consoles from Sony and Nintendo. Some reports even suggest that Microsoft could make an announcement during the E3 2016 trade show this June.

On the other hand, Microsoft could also possibly release the Xbox Two in 2020, which is also rumored to be the release date for Sony's PlayStation 5.

More details will be announced soon.