Apparently going under the codename Napoleon, the new hardware sticks very much to the aesthetic of the current machine, though looks to be considerably smaller than the current machine.
There is, of course, the possibility that the machine pictured is nothing other than the Xbox 360 HD-DVD drive.
The rumours come not long after snaps appeared of what appeared to be the innards of the new machine.
If true it will be the first time Microsoft has completely overhauled an Xbox design – previously it has stuck just to internal tweaking.
All signs point to a reveal at E3 this June, though the official word until now has been that Microsoft “does not comment on rumour and speculation”.