Citing unnamed sources, several blogs that cover the computer hardware market claim the Xbox 720 will use next-generation processors and graphics chips from IBM and ATI. Specifically, reports suggest the console will use a new, 32-nanometer PowerPC chip called Oban, designed by IBM and produced by IBM and Global Foundries, and an ATI "Southern Islands" GPU.
Industry bloggers claim that the chips are now in production, but most believe they are for development purposes only and that the Xbox 720 will not be available at retail until 2013.
The Xbox 360 uses a triple-core IBM Xenon chip, and an ATI Xenos GPU. Reports indicate the 720 architecture could be seven times as fast. Other reports say the Xbox 720 will include a Blu-Ray disc player and updated version of the Kinect motion control system. Microsoft has not commented on the reports.
[ What role will the Xbox play for Microsoft this year? Read 5 Moves Microsoft Must Make In 2012. ]
It's also been reported that the Xbox 720 will use some form of copy-protection technology that will prevent users from playing used games, but those reports are also unconfirmed.
While it began life strictly as a gaming console, the Xbox platform has become increasingly strategic for Microsoft. The Xbox Live network serves up movies, music, and cloud services like social networking and messaging. Kinect, meanwhile, is making its way to Windows PCs--paving the way for hands-free scientific, medical, and industrial applications that go well beyond gaming.
Guinness Records recently ranked Kinect as the fastest-selling tech gadget of all time.
The investments are paying off. Microsoft's Entertainment and Devices unit, which houses Xbox products and services, has been one of the company's strongest performing divisions over the past several quarters. In the most recent three-month period, ended December 31, Xbox platform revenues were up 9%, year-over-year, to about $3.9 billion, according to Microsoft.
The company shipped 8.2 million Xbox 360 consoles during the quarter, compared to 6.3 million last year.
Microsoft launched the first Xbox in late 2001. The Xbox 360 debuted in 2005, making it almost seven years old.
That fact alone is driving much of the speculation about the company's plans for a successor. There were rumors that Microsoft would go so far as to announce Xbox 720 at the Consumer Electronics Show earlier this month in Las Vegas, but they turned out to be unfounded.
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