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There are those internally at Microsoft who are sensitive to consumer unrest at the prospect of more powerful hardware so quickly compared to the previous console generation.

The Xbox 360 was released in November 2005, the Xbox One in November 2013.

Amending his initial post on the update, which also saw a flurry of complaints from disgruntled 360 users in the comments section, Microsoft's Major Nelson says that the company is aware of the problems and that they are investigating it, although there's no indication when a fix for the fix will be available.

[Update: Microsoft has confirmed "Project Scorpio." The console will deliver 6 teraflops of computing capability, and true 4K resolution.

However, after GDC, evidence industry-wide has indicated that Sony's timetable for the Neo either has accelerated or was always intended for this fall.

Because of this and other factors, Microsoft is feeling pressure to announce both its new, smaller Xbox One console and the upgraded Scorpio — colloquially referred to internally as Xbox One-Two — at this year's E3, or a last-minute event just prior to the LA convention.

The current performance target for Microsoft's Scorpio is approximately 6 teraflops.

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"We can effectively feel a little bit more like we see on PC, where I can still go back and run my old Doom and Quake games that I used to play years ago but I can still see the best 4K games come out and my library is always with me," Spencer said.

Kotaku also reports that Scorpio will be "technically capable of supporting the Oculus Rift." Polygon's sources verified that while Scorpio will be technically capable of supporting the Oculus Rift, Microsoft's relationship with the virtual reality headset maker hasn't changed since it was announced last summer.

Microsoft originally had no plans to announce Scorpio in 2016, preferring to wait until next year, possibly at its own event prior to E3 2017.

While Xbox 360 users with 1080p displays enthusiastically greeted last week's dashboard update, it seems some folks are finding that the update is causing more problems than it fixes, with reports of random crashes, bricked consoles, and various display issues filling the forums on the official Xbox site, among other sites.

From the looks of it, the majority of problems appear to be coming from those using VGA connections and resolutions less than 1080p, though there seems to be no limit to those affected.