Rumors have been circulating for quite a while that the next Xbox will require an always-on Internet connection. Most recently, sources claimed that the system would only grant a 3-minute offline grace period. A purported internal memo now contradicts those reports, stating that the system will "just work" when it comes to certain offline functions that users expect.
Ars Technica reports that an internal e-mail was sent to all full-time employees working on the next Xbox. "Durango [the codename for the next Xbox] is designed to deliver the future of entertainment while engineered to be tolerant of today's Internet," it states. "There are a number of scenarios that our users expect to work without an Internet connection, and those should 'just work' regardless of their current connection status. Those include, but are not limited to: playing a Blu-ray disc, watching live TV, and yes playing a single player game."
If legitimate, the e-mail would mean that the next Xbox will allow some level of offline functionality, either by simply playing offline or by activating games online and then being able to play offline, a la Steam. The quote also seems to imply that the next Xbox will connect with cable for live TV viewing. Microsoft has been especially keen on positioning the Xbox as an entertainment brand lately.
This is a rumor for the time being, of course, and we don't expect Microsoft to confirm or deny anything until May 21.