The Kotaku report cites a "reliable industry source" who suggests the company will appease publishers by clamping down on the second-hand games market.
The source had no information on how Microsoft planned to integrate such a scheme, which could alienate a massive array of potential buyers and push them into the arms of Sony's new PlayStation.
Gamers have come to rely on selling their old titles in order to fund new games, while renting from companies like LOVEFiLM offers a nice try-before-you-splurge-£45 option.
There have been plenty of Xbox '720' rumours over the last few days, but we're struggling to envisage this one.
Speaking of rumours...
The same Kotaku report also claims it has been informed by gaming industry sources that Microsoft will also adopt the Blu-ray standard for the new console.
The company bet on the failed HD-DVD standard back in 2007 when it launched a peripheral for the console.
Ever since, folks have been badgering Microsoft to launch an external Blu-ray drive.
However, although the PS3 contains the hardware, it would be somewhat surprising to see Microsoft back-away from its long-held position that digital streaming is the way forward.
The company has focused much of its recent efforts on turning Xbox LIVE into a one-stop shop for all of your home entertainment needs.
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A technology journalist, writer and videographer of many magazines and websites including T3, Gadget Magazine and TechRadar.com. He specializes in applications for smartphones, tablets and handheld devices, with bylines also at The Guardian, WIRED, Trusted Reviews and Wareable. Chris is also the podcast host for The Liverpool Way. As well as tech and football, Chris is a pop-punk fan and enjoys the art of wrasslin'.