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Based upon a comment by some random person on Reddit?
"an insider with a good track record of leaking unannounced information regarding Microsoft’s plans"

It sounds like he/she has successfully leaked information before.

Go look at that thread too. It is ridiculous. He's a brand new user who just started one thread called "IAMA someone who 'leaks' information about Microsoft's future plans. AMAA" and in it he says "I do not work for Microsoft, any of it partners or contractors" yet he seems to know everything about a wide variety of things inside MS from dev tools to Windows to xbox, I didn't see a single "I don't know" reply in the thread. There are a lot of redflags in there on that being a huge load of BS.
If its true and an ARM arch is used, I wonder if it says anything about their next-gen system's hardware. Seems a bit strange to use ARM in between two PowerPC systems (assuming they stick with IBM) when it comes to backwards/forwards compatibility between platforms. I suppose this 'lite' system could just be a red headed stepchild, stop-gap product that they're willing to toss aside at a later date.
> "Seems a bit strange to use ARM in between two PowerPC systems"

It makes perfect sense if they're more concerned about integration with Windows Phone and Windows 8 ARM tablets.

If they're courting those developers and building that ecosystem, uniting the architecture and development platforms would be a big win.

It's possible this system could be limited to XNA; which would ensure that whatever runs on this theoretical 'lite' system would also run on the 360, Windows Phone, and likely any successor to the 360; thus the arch would be meaningless.
It's almost too obvious. The Xbox360 is a pretty impressive media platform. My parents bought one for the 1080p streaming video, Netflix and basic Kinect games. They've never picked up a controller I'm sure. With the Apple TV and Raspberry PI making home entertainment simple, compact and cheap, it seems natural to extend the Xbox brand to a more simple device to target those without an Xbox.