Microsoft has reportedly begun work on an improved chip for the Xbox Series X console. The new chip is claimed to be smaller, more power-efficient, and could lead to a lower cost of production.
A smaller chip won't necessarily mean a slimmer version of the Xbox Series X, this early into its life-cycle. For a comparison, the Xbox 360 Slim was released five years after the original console came out and the Xbox One S came out three years after the Release of the Xbox One.
It's also unclear if the chip would be used as part of a mid-cycle console refresh. It's more plausible that the revision would be merely an internal one and leave the current Xbox Series X’s outer design unchanged, equivalent to how Sony's revised PS5 console features a smaller and lighter heatsink while still retaining its unique design.
As for the future of the Xbox, Microsoft confirmed last year that new Xbox hardware is currently being developed, although we won't be seeing it for some time.
"Cloud is key to our hardware and Game Pass roadmaps," Liz Hamren, Microsoft's CVP of Gaming Experiences and Platforms, said at the time. "But no one should think we're slowing down on our core console engineering. In fact, we're accelerating it. We're already hard at work on new hardware and platforms, some of which won't come to light for years."
Even with a supply shortage that is ongoing, the Xbox Series X and its smaller Series S cousin have managed to sell quite well since their initial launch in November 2020.
As of January 2022, analysts have estimated that the Xbox Series X/S consoles combined will ship 12 million units since their launch globally.