The console is said to let gamers capture their gameplay and go back and select highlights, according to sources speaking with Polygon, noting that this rivals the PS4 and its DualShock 4 controller's share button.
This DVR-like functionality can reportedly be turned on or off at will, and includes a unique auto-capture setting to record certain in-game events.
Headshots and collecting specific "Achievements" were given examples as to what would trigger this automatic DVR feature, which is said to be available only for next-generation Xbox games.
Once captured, the videos can be uploaded to sites like YouTube for seamless sharing to a gamer's social circles.
Xbox Live friends overhaul
Speaking of social networking strategy, Microsoft is taking notes from Twitter, according to the report, by changing up Xbox Live's current method of adding new friends.
Instead of requiring permissions from both parties, the gaming service is said to have a Twitter-like feature of simply adding followers and being followed.
Microsoft, in effect, would also be doing away with the annoying friend cap that currently limits profiles to having 100 Xbox Live friends.
Unlocking the power of Achievements
Developers will reportedly be able to add these unlockable awards after a game has launched. Right now, they are limited to doing this through separate downloadable content.
Weekend challenges and communal goals are also listed as examples in which developers can extend the replay value of their games via Xbox 720 Achievements.
Developer-created Double XP weekends in games like Call of Duty: Black Ops 2 are very popular right now, but they don't have a lasting impact on everyone's Xbox Live gamerscore. This idea could solve that problem.
The report also indicated that companies will be able to create cross-title Achievements.
This would give gamers the ability to earn rewards for playing unrelated games from the same publisher, for example.
Cross-platform Achievements are not what they sound like at first, though. These awards would be earned by playing a game on the new Xbox, then using a companion app, website or playing an Xbox 360 prequel.
So, no, it may be a gamer's dream, but Microsoft and Sony won't be working together on Achievements anytime soon.
Always-on rumors backed up...again
These squeaky sources also told Polygon that the new Xbox will in fact have "some form of an always-on requirement."
There are plenty of reasons why an always-online Xbox 720 isn't a good idea, but the report does mention that the feature may be in support of non-gaming entertainment applications that will be launched alongside the console.
This may include streaming video services that would need an online connection anyway as well as a possible anti-piracy tool.
Microsoft's guidelines, as they are currently laid out, are said to allow publishers to decide whether a game will require an internet connection for a one-time authentication or a constant connection.
The promising DVR-like gameplay functionality and Xbox Live expansion, and the not-so-promising DRM restrictions, if true, should be revealed less than a month from now.