Both the next Xbox and the PS4 will be "Always On". "Always On" is in reference to low-power states. Both devices will be able to at least go into a stand-by mode, so users can quickly resume activities such as gaming.
DRM on the next Xbox does not require an Internet connection.
As Paul Thurrot explained, the Metro applications on Windows 8 require a connection because the applications are live, actively updated applications. Xbox 8 will fundamentally operate in the same way. You may have some off-line functionality, but the majority of the experience with the next Xbox will benefit from an Internet connection.
This isn't even any different from the Xbox 360. The console defaults to automatically signing an individual in, whereby all the content available to the user and the application functionality changes. Don't sign into Xbox LIVE with the Xbox 360 and see what content you have available to you. Essentially none, except disc & Xbox LIVE Arcade games, and local media.
The problem is that people keep interchanging "always on" with a network connectivity state. It isn't. "Always Connected" and that is the desired state. You can turn an Xbox 8 off, it doesn't have to be maintained in a low power state, but the ideal experience would be "Always On". Likewise, an Xbox 8 can be used off-line, but the ideal state would be online.
Again, the vast majority of Xbox 360 consoles are connected devices. There are two groups that this impacts the most, 360 owners without available or reliable broadband Internet, and software pirates. Something makes me think that software pirates are the most vocal group in this matter, second only to PS3 fans.







