Microsoft’s first response to the wave of Xbox 360 Zephyr rumors is no different to the response Apple gives when asked about new products: an elaborate ‘no comment’. Details within…

After seeing the pics on Engadget, showing what clearly looks like the back of an Xbox 360 with a HDMI socket, it’s hard to say whether it’s a real pic, or just one that’s been Photoshopped. After all, we’ve all seen a squillion iPod phone fake pics, so it’s not as if altering photos with Photoshop is anything new.

However, it’s always a good idea to go to the source to see what they say – or what they don’t say. Sometimes it’s telling what a company doesn’t say, as it could give you clues as to what’s really going on.

Gametrailers say that that contacted Microsoft representatives, who made the following statement: "We have seen all types of claimed leaked photos like this show up online and as a standard policy we don't comment on speculative items."

Did we expect anything different? Just like Apple, Microsoft is keeping its lips sealed – while potentially being responsible for leaking images to Engadget. Politicians do this kind of thing all the time, it’s a classic way of ‘raising a flag’ to see if it gets shot down, or not.

The thing is, it makes sense for Microsoft to release an updated Xbox 360. A cooler 65nm processor that takes less power to run makes sense. A 120Gb hard drive makes sense. And now that the Xbox 360 definitely does 1080p HD, an HDMI connection just makes sense.

We know that Microsoft have been vigilant at decreasing costs of Xbox 360 production so they can start turning the loss making Xbox franchise into a profit center. That’s been the plan from Day 1, and it’s finally happening. With a rumored 10.4 million Xbox 360’s sold in 2006, fulfilling Microsoft’s target of 10m consoles in 2006, something we’ll probably get confirmation of at CES, and possible in Bill Gates’ CES Keynote, this is a lead they’ve bet the company on, and so far, they have won.

Microsoft does not want to see their hard-fought lead usurped by the Wii or the PS3. In console land, all out WAR is underway, and all three companies will pull out ALL the stops in 2007 to ensure that they are on top of the heap come January 2008 when the media is analyzing Christmas sales.

There’s no doubt that Microsoft wants a repeat of Christmas 2006 – they want to be Number 1. An updated Xbox 360 is one way to make sure this happens. The other way is more groundbreaking games like Gears of War. Halo 3 will be a prime part of the strategy, but I’m sure that Microsoft isn’t only banking on Halo 3.

Microsoft is in a position it knows well, and at the same time, in console land, has never been in before. Microsoft knows what it’s like to be Number 1 in the PC and operating system space.

But being Number 1 in consoles is new. And once Microsoft gets the lead, they hate to lose. Being able to sell an updated Xbox 360 – at the same price as it is today, while the older ones get a ‘price drop’ ensures that Microsoft does indeed ‘drop the price’ of the Xbox 360 while the new model stays at the same RRP.

Gamers of all stripes – 2007 is the watershed year of computer and console gaming. Watch out – you’re being targeted by the top three games console makers to buy, buy, buy and play, play, play, with more realistic, lifelike and graphically outstanding experiences than ever before, with a game playability factor to match.

Bring on the Xbox 360 Mark II, Microsoft. We’re waiting to see how you’ll perform under pressure from the gears of war that defines the 2007 console gaming market. With luck, and a great deal of hard work, it’ll be your console will be wearing the halo of sales leader come December 31, 2007.

But we're talking high pressure stakes here. Slip up, and that halo might be atop the PS3 or the Wii. There can be no doubt that Microsoft is betting the company on the Xbox 360 this year, not just Windows Vista.
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Alex Zaharov-Reutt  CES  Consoles  Games  Microsoft  Xbox