It may be possible that Microsoft will slim down the Xbox 360 next year.
According to IndustryGamers, it's a tossup whether Microsoft will invest the time and revenue in refreshing the overall Xbox 360 design to reflect a "slim" look. The survey stems from the announcement that Sony's PlayStation 3 Slim is about to hit store shelves (August 26), however it's important to remember that Microsoft did not take the "slim" avenue with the original Xbox despite Sony's re-mastering of the PlayStation 2.
"I think it is a question of when not if," said David Cole of the DFC Intelligence. "However, the when part is a big uncertainty...rumors have been going on for a long time. I think people were asking me the same question last year at this time." Cole believes that Project Natal will have an impact on the overall decision to slim down the Xbox 360. Even still, the company said that there is an anticipated major redesign in sight for 2010.
Other analysts chimed in with their feedback, most of which also tune in to Project Natal as Microsoft's next big change. Michael Pachter of Wedbush Morgan doesn't think a slim version is even in the forecast. "They had a redesign to eliminate the RROD issue, changed the heat sink, fan and a couple of other components. I'm not sure that they need to redesign the box, although I see the Elite black box becoming the standard."
Jesse Divnich of EEDAR said that reducing the size of the Xbox 360 would provide financial benefits for the manufacturer by decreasing shipping costs, packaging material, and more. However, a redesigned model may mislead consumers into thinking the hardware problems have been resolved.
"Throw in some physical alterations to the design of the Xbox 360 (i.e. making it smaller) and consumers are more likely to believe that their new Xbox 360 is 'more reliable'," Divnich said. "Consumers are more apt to believe a change has occurred if they can physically see a difference, even if the physical difference (in this case, the size of the Xbox 360) has nothing to do with the failure rate of the console."

As for the Xbox 360 Slim - why would Microsoft bother investing in all that? It isn't necessarily that big anyway. Sure it's a little on the chunky side, but it's really not a problem.
This just sounds funny the way he is slamming Microsoft. I thought the idea behind a redesign/re-engineered piece of hardware was for this very reason - to make it better.
The reason the PS3 needs a Blu-Ray player is because that's the disc that the games are made on. The Xbox however uses DVD for it's games. If they did put a Blu-Ray player internally into the console, then it would drive costs way up, would be useless in terms of being beneficial towards the console purpose (because again the games are DVD), and it would not be able to read the Xbox 360 DVD (or a DVD at all because of the laser) out of the box.
It would be better to do an add-on like the HD-DVD player was if anything. Otherwise, the Blu-Ray players are falling in price quite hard lately and you can find one less than $100 (less than $60 for a computer optical drive) if you find a good sale.
I would rather pay less for a gaming console rather than pay more for a multimedia center all-in-one, this is what put the PS3 in trouble in the first place.
As a 360/PS3 programmaer, I can assure you that the 360 still has plenty of processing headroom for the next couple of years. I'd expect to see a new Xbox in 2012
I'd buy the one that fails less.
"Because we didn't lose enough extending warranties on RROD - now we make it smaller and compound heat dissipation problems
I'm a sony fan... always have been in the gaming industry... I bought a PS3 when it was full price and I haven't regretted it. However, I am very disappointed with the announcement of its latest firmware revision which DOESN'T contain the software PS2 emulator that they patented and everyone's been excited about.