A leaked Microsoft email obtained by Ars Technica indicates that the Next Generation Xbox console will work without an internet connection. The note states that the system will still work when running a Blu-ray disc, playing single-player games, and watching live TV without Internet connectivity.
“Durango [the codename for the next Xbox] is designed to deliver the future of entertainment while engineered to be tolerant of today’s Internet. 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.”