Not to be outdone by their rivals over at Sony who are releasing the Playstation VR headset in October, it looks like Microsoft are getting ready to unveil a new VR-friendly Xbox One console at the E3 conference next month.

Arstechnica have confirmed that a major developer is planning to unveil a VR game for the Xbox One at E3, and it will be launching in 2017. Adding to mix are reports that emerged last week on Polygon that say a new Xbox One will be released in the latter part of 2017.

According to the rumors, the new console is 4 times more powerful and 40 percent smaller than the current Xbox One, and it supports Ultra HD 4K. So far, there doesn’t seem to be any solid reports of the new console being VR-capable, but if I was a betting man, I’d put money on it..

Even if Xbox One VR isn’t announced during next month’s E3, there’s no doubt Microsoft have major plans for VR. Phil Spencer, the head of Microsoft’s Xbox division recently tweeted about how his team have been “breaking new ground” ahead of the E3 event.

He could be referring to a project called Flashback, the result of Microsoft’s efforts to find the middle ground between expensive dedicated VR systems like the Oculus Rift and HTC Vive which require hi-spec computers; and mobile VR headsets which deliver a less than great experience unless you’re using a high-end smartphone.

Flashback might be the answer, as it will apparently equip lower spec computers and smartphones with the tools to provide a stutter-free VR experience and cut out motion sickness by pre-rendering content to help with the processing power.