Microsoft is rumoured to be readying an Xbox 360 slim unit that could launch with Project Natal this year.
The trimmed-down model would arrive to help prolong the lifecycle of the console, and could be released as a bundle at retail with Natal.
Reports over a redesigned Xbox 360 surfaced earleir this month when pictures of a new motherboard appeared online, as well as rumours of Xbox 360s becoming compatible with external hard drives.
Analyst Nick Parker told MCV: The slim version will probably include other improvements in a move to prolong the lifecycle of the Xbox 360 as a brand.
Like anything its success will depend on its price, but of course it does make sense for Microsoft to offer a bundle with Natal.”
When asked about the possibility of an Xbox 360 slim, a spokesperson said: Microsoft does not comment on rumour or speculation.”
2010 is set to be a major year for Xbox, with several new titles such as Halo: Reach, Fable III and Crackdown 2 scheduled for release alongside the firm's Project Natal.
Microsoft's European boss Chris Lewis previously told us: 2010 is set to be the biggest in Xbox history and a major year for the games industry, where we will witness a fundamental change in the way we experience and share entertainment with each other.”
The computer giant has also confirmed that Project Natal will be available before Christmas, and is likely to go on sale during November or December 2010.
MCV understands it could be sold for as little as 50.