The plans, according to Bloomberg's report will make current generation Xbox games will not be compatible with the new console, which is now likely to be revealed on May 21st.
The report claims Microsoft hopes the switch to an AMD system-on-a-chip, powered by the Jaguar processor, will make it easier for developers to make make games available on the console, while also cutting the build costs.
Because of the shift to the PC-friendly x86 format, games can be more easily tweaked for release on the console and the personal computer.
Richard Doherty, president of consoling firm Envisioneering Group told Bloomberg: “We’ll probably see many more titles because the console makers are saying the publishers are back in the driver’s seat.
He added that developers will not have to rebuilt certain game aesthetics such as “smoke, shading and reflections for each machine and can essentially create once and port once, and be done.”
If the reports are true, then it's great news for AMD, who will also be providing the processing power for the recently-revealed Sony PlayStation 4 console.
However, it's not too great for Xbox 360 fans hoping to play their hoards of titles on the new console, which is likely to be released in time for Christmas.
Sony has promised that some of its older titles will be available to download via its Gaikai cloud gaming property, so perhaps Microsoft has a similar scheme up its sleeve.