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The new version of the Xbox 360could launch at the E3 games event next month in a bid to halt theprogress of Nintendo and Sony in the console wars.
According to Trusted Reviews, the new Xbox will be unveiled around 15 July, then scheduled for launch mid-August this year.
Down the Arcade Atthe moment, this means the future is unclear for the current Premiumversions of the Xbox 360, which have just 20GB of internal memory.
It'slikely that this update will be badged as a new product, but willeventually replace the 20GB version, because the cost differencebetween the two consoles is pennies.
Jon Hicks, editor of Xbox 360: The Official Xbox Magazine says: "It's only a rumour at this point, but it's a sensible one.
"Withmore and larger content being released on Xbox Live, it makes sense forMicrosoft to offer a bundle that takes better advantage of it.
"Thereal news, however, would be if it meant the end of the hard-drive-freeArcade version. If Microsoft started selling all Xbox 360's with a harddrive as standard, it would make life easier for the game developers -but with such a huge install base already, I'd be surprised if theywent down that route."
Microsoft also has the Elite 120GBmodel, and given the push the company is giving HD downloads, we'd haveto assume this will be the one to promote for that function, as HD anda few game downloads will eat up space faster than hungry, hungryhippos.