Update: Microsoft announced an updated version of the Xbox 360 on June 14, 2010. The new model has a smaller chassis, 250GB hard drive, and built-in 802.11n Wi-Fi, but no Blu-ray. See the Xbox 360 Slim product page for additional information.
Take this one with a grain of salt, but gaming site 1UP is reporting that it's hearing a new Xbox 360 is in the works and is set to be released next fall in conjunction with the release of Project Natal. That in itself isn't all that newsworthy since it seems pretty logical that Microsoft would put out a new console with the release of its fancy new, you-are-the-controller technology that was demonstrated at E3 this month. However, 1UP is saying that while the new Xbox 360 will carry a new name and be a "new platform," it won't necessarily be much of an upgrade over the existing 360.
Here's the full quote:
"It's not clear what sort of upgrades we might see, but some have suggested it will be a slight upgrade of the current Xbox 360 technology. Current Xbox 360 games would be playable on it, but future games would be able to take advantage of the added muscle."
The article also adds that, "Games played on the more advanced Xbox would look or perform better, but publishers will still be able to support owners of both systems."
Again, this all makes sense, and you'd expect Microsoft (and possibly Sony) to have some new hardware a year from now. But it will interesting to see how Microsoft manages gamers' expectations and the sales of its consoles as it gets closer to releasing Project Natal. It's also important to note that Microsoft has said the new technology will work with existing Xbox 360s so long as you add the new video camera accessory.
How much credence do you think this rumor has? And if Microsoft is indeed going to release a whole new Xbox 360, what do you think it should be called? Xbox 360 Natal doesn't have the greatest ring to it.