The issue of a permanent internet connection has been a sensitive subject in recent weeks.
This option would allow the use of entertainment applications such as streaming video and would also be an anti-piracy tool.
According to the report, the decision on whether a constant Internet connection will be needed for a game is to be decided by the game developer.
In addition, the console will be able to capture gameplay “as if it were a DVR.”
Like the PlayStation 4, a Share function will allow the sharing of images and videos via various social networks, including Facebook and Ustream.
Players would even be able to edit the recorded footage before posting it, while another option would automatically activate video recording when certain in-game events take place, such as a headshot.
Reports suggest the next Xbox is slated for an early November launch for a price of $299.
Rumored specs include a 1.6GHz 8-core AMD processor, 8GB of RAM, a Blu-ray Disc drive, an 800MHz graphics processor, and Gigabit Ethernet connectivity.