Microsoft has officially confirmed that the next-generation of Xbox consoles is in the works and it's more than just a new box under your TV.

Microsoft Corp. (MSFT) has entered a multi-year strategic partnership with Advanced Micro Devices, Inc. (AMD) to co-develop custom chips for its product lineup, including next-generation Xbox consoles.

Microsoft’s Sarah Bond has announced a strategic partnership with AMD to engineer and build the next generation of Xbox consoles and handheld devices together. “Together with AMD we’re advancing the state of art in gaming silicon to deliver the next generation of graphics innovation to unlock a deeper level of visual quality and immersive gameplay and player experiences enhanced with the power of AI,