Microsoft Corp. could introduce a second-generation **** 360 video game console as early as Wednesday, media reports suggest.
Rumours and alleged photos of the new version have been spurring heavy speculation on internet video game and gadget discussion forums for weeks, some of which are correct, according to at least one technology reporter.
Microsoft does plan to add a new high-end version of its flagship console soon, according to unnamed sources cited by Dean Takahashi, a technology columnist at the San Jose Mercury News.
"It's true that Microsoft is preparing to announce the **** 360 Elite," Takahashi wrote in the newspaper's video games blog on Saturday. "Several sources confirmed Microsoft plans to add this box to its product line."
Takahashi is the author of several books on Microsoft's video games consoles. They include The **** 360 Uncloaked, for which he was given unprecedented access during the research phase.

According to Takahashi, the new **** 360 Elite will combine:

• Advanced features such as a 120-gigabyte hard drive.
• The ability to play a TV signal over Internet Protocol.
• Possibly a high-definition (HDMI) connector to feed the signal to a high-definition screen, all encased in black plastic, for $479 US.

The new console would not include a high-definition HD-DVD drive, he noted.

Console coming soon: reports
The new **** could debut as early as Wednesday, according to Wired News video game reporter Chris Kohler.
In a post to his Game Life blog on Monday, Kohler wrote that a Microsoft representative e-mailed him about "very exciting announcements" to be made on Wednesday, and offered him an interview with **** hardware team manager Albert Penello.
"Obviously, this isn't 100 per cent confirmation, but I'm pretty comfortable sticking my neck out on this one," Kohler wrote.
Takahashi said the console is set to debut soon.

"It is our standard policy to not comment on speculation," Jeremy Bartram, a spokesman with Microsoft's public relations agency in Seattle, told CBC News Online when asked for official comment on the rumours. "Microsoft has not announced anything regarding a new **** 360."

Microsoft's Canadian spokespeople made a similar statement in response to CBC's inquiries.

Microsoft targeting ****: experts
Purported photos of the console and advertising for its 120 GB hard drive have surfaced on the internet in recent days. One set of images on a Chinese-language website supposedly depicts units of the new console coming off an assembly line in a Chinese factory. An image published on the **** 360 Fanboy website on Monday is alleged to be a shot of a poster promoting the new hard drive.

If Takahashi and rumours circulating on the internet are correct, the refreshed console would be a significant improvement on the existing versions, and surpass rival **** Computer Entertainment Inc.'s *********** 3 console on some features, according to observers who spoke to CBC News Online.

The current **** 360, moulded in white plastic, comes in two versions. The Premium version includes a 20-gigabyte hard drive but no HDMI connector and retails in Canada for about $500. A lower-priced Core version sells without the hard drive and several accessories for about $400.

**** sells two versions of its *********** 3 console, both of which include a high-definition Blu-Ray DVD drive built-in. The premium version of the console, which has a 60-gigabyte hard drive, sells for about $660 in Canada, while a version with a 20-gigabyte hard drive is priced at about $550. Neither includes an HDMI connector.

"A 120 [gigabyte] hard drive versus 60 [gigabytes] on the PS3 sounds like penis envy on the part of Microsoft," said Michael Pachter, head of research at Wedbush Morgan Securities in Los Angeles, Calif.

"One thing I'm pretty confident is wrong [about the reports] is that it includes an HDMI cable," he said, explaining he had recently bought one for $300 US. "It's frickin' expensive, which is why the PS3 doesn't come with one, and Microsoft doesn't have the buying power to make it cheap."
Eddie Chan, an analyst with market research firm IDC Canada, disagreed.
"The HDMI cable is a non-issue in my books," he said, explaining that bridging the gap between an analog signal and a superior digital signal is a logical step.

The price is just a function of how "clean" a signal you want, and most people are not going to shell out for a top-quality cable that has low electrical resistance (and therefore a better signal) for what they may see as a marginal improvement on picture quality, he explained.
"Sure, you can pay $300 for a Monster [brand cable] and lower-priced cables have more resistance, but you can get one for cheap — $10 or $20," Chan said.

Device sets stage for IPTV
"It would not surprise me to see a new console come to fruition," he added, noting that Microsoft has been talking about Internet Protocol-based TV (IPTV), which would use internet technology to stream a video signal across a data network such as Microsoft's **** Live. "It's probably a good segue in preparation for those rollouts."

In a keynote address at the Consumer Electronics Show in Las Vegas in January, Microsoft founder Bill Gates and Robbie Bach, president of the entertainment and devices division, made remarks that some say hinted at the new console.

"I can play the best next-generation games, download movies and TV shows, connect to my Windows PC, and access my music and my photos, watch HD-DVDs, and now experience next-generation TV programs with IPTV," or Internet Protocol TV, Bach said. "This is everything I want, it's all in one box, it's all on **** 360."

"It's pretty self-evident what the strategy is," Sam Punnett, president of Toronto-based FAD Research Inc., said about Microsoft's approach. "It's reminiscent of the walled garden idea — they have a sufficient claim to a captive audience that they can create an environment to sell content."
Punnett, who has been a consultant to federal and provincial governments on developing strategies that would foster new media and video game industries in Canada, noted that Microsoft has a unique advantage over competitors.

"They have that channel into the living room that no one else has," he said. "They can take that captive audience and branch it off … and expand into music services, streaming video. It's one of those [Holy] Grail dreams of the games industry."

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