If Microsoft is indeed preparing a second next-generation Xbox console, it could be half the price of the Xbox Series X.

According to a reasonably reliable technical informant who goes by the name eastmen on the Beyond3D forum, he claims that a Microsoft insider tipped them off about an all-digital Xbox console that would be significantly cheaper than the Xbox Series X and PS5 He states.

"The last I heard was half the price of the XSX [Xbox Series X] and MS [Microsoft] is preparing a $400 XSX. I don't know what the final price will be," said Toumon. If Sony is $500/$600, MS might come in at $200/$400/$500, but we'll see what happens."

We have previously seen mention of a low-budget, all-digital next-generation Xbox, codenamed Project Lockhart (or Xbox Series S according to some rumors). Essentially, it would have no disk drive and would likely be lower power than the flagship Xbox Series X, but could run games at acceptable resolutions and frame rates.

Given that Microsoft is reportedly undercutting the PS5 in price for the Xbox Series X, one might wonder why a second Xbox console is necessary. Not everyone is willing to invest $400 in a dedicated gaming console, so a less expensive alternative could have a lot of appeal.

Furthermore, the Xbox Lockhart will likely be a gaming console designed to work with Xbox Game Pass, which provides access to a wide range of Xbox games for a monthly fee. Having a console that is bundled with a subscription and supports game streaming via Microsoft Project xCloud would allow Microsoft to get more people to choose their next console over the PS5.

Of course, Microsoft could lose money by selling hardware at a discount. But eastman believes that any losses will be made up by Microsoft's game sales and subscription fees.

"MS will make up any losses by taking a higher share from game sales or increasing subscriptions," says eastman.

Thus, not only is the Xbox Lockhart console likely, but it will play a good role in the overall Xbox ecosystem by the end of the year.

Microsoft plans to hold a large Xbox showcase in July, where it expects first-party games and console-exclusive games like Halo Infinite to be revealed. However, according to eastmen, that will not be mere retaliation for Sony's June 11 PS5 game reveal event, but an even more important event.

"From everything I've heard from sources, July is not about Sony, July is about the industry, and (Microsoft) wants to make it a mic drop night.

"[Microsoft] wants to make it a mic drop night. So, following a series of mic-dropping moments, expect price to be an important part of all this."

This may be a bit of an exaggeration, but Microsoft has the scale and scope to shake things up on an industry-wide level, thanks to all the technology and services under its corporate banner.

In other words, while Sony has standalone console-like machines for exclusive titles like Horizon Forbidden West, the Xbox Series X is just the tip of the iceberg for Microsoft's overall ambitions for the Xbox July could be a really interesting month for next-gen gaming.