Last week, we brought you the rumor (from VideoGamer.com) that Crysis developer Crytek was working on a game for the next Microsoft console. Crytek supposedly is working on TimeSplitters 4, and a higher-up at Crytek said that Microsoft planned to announce a next-gen Xbox in the next year. This led some to assume that Crytek has the next gen Xbox in its possession. Crytek has issued a statement clarifying the claim saying Crytek does "not have any next generation hardware from Microsoft." The company also said it doesn't know when/if Microsoft plans to announce its future console.
Crytek's statement went on to say CryEngine will be the "next generation engine for all consoles."
Reading between the lines of Crytek's statements and the original post from VideoGamer, it seems to me that some people misread Crytek's original statement and VG's article. The article cites a source saying that the Crytek is working on a game for Microsoft's next-gen console, not that it has one in its possession. It would be easy to make that mistake, but I think Crytek's point is that the company is developing games now, for the next generation of console. Consoles that probably may not actually exist as anything more than ideas.
Hope that clears everything up!