What Microsoft Must Do With Their Rumored Xbox 360 Slim

Microsoft may be developing a slim Xbox 360 to compete with the PlayStation 3 slim. The rumor regarding the slim Xbox 360 has caught fire since a Chinese message board featured pictures of a new, significantly smaller motherboard that features a CPU/GPU combination chip.

The first photo shows off the entire motherboard with a fan on top of the CPU/GPU chip. The second photo highlights the area underneath the fan and reveals a combined CPU/GPU chip. The photos show significant size changes compared to the normal Xbox 360 motherboard and these changes indicate that the casing of the Xbox 360 will have to change as well to accommodate such a small motherboard.

If these images are authentic, and they seem to be given some credence due to the fact that, when questioned by GameSpot, Microsoft did not flat-out deny that the images are authentic, they indicate a much-needed reboot for the Xbox 360. The Xbox 360 is more than four years old, which already exceeds the lifespan of the original Xbox, and while it is an efficient machine, Microsoft needs to compete with Sony, whose PlayStation 3 has been gaining much traction in the past year thanks to a strong lineup of exclusive titles and the release of the PlayStation 3 slim.

The PlayStation 3 Slim was released last year and sold more than one million copies in just three weeks. That sort of sales drive indicates that customers crave smaller consoles, and the Xbox 360, while pretty, is large. Furthermore, Microsoft has spent the last couple of years attempting to fix Xbox 360’s that suffered from the Red Ring of Death (RROD). The Red Ring of Death occurred on a huge number of Xbox 360 consoles due to overheating issues, which lead to the death of the CPU. While Microsoft’s changes have led to a decrease in instances of RROD, customers may still associate the original Xbox 360 with the issue. A knowledgeable gamer may look at an Xbox 360 on the store shelve and fear that the product won’t work properly. A new, slim, and outwardly different Xbox 360 console is the perfect way for Microsoft to make a clear statement that this is a step in a new direction.

Beyond a new, smaller motherboard, the pictures also indicate that Microsoft may be migrating to an internal hard drive for the next iteration of the Xbox 360. The photos show that the motherboard is without a special hard-drive port. If so, it would be moving again in the direction of Sony. Microsoft’s external hard drives have had both positive results and negative. On the positive end, gamers who buy an Xbox 360 with a 20 GB hard drive might be excited to know they can easily upgrade the hard drive if they run out of space. However, on the other end of the spectrum, the Xbox 360’s lack of a hard drive requirement led to difficulties for developers (who had to keep in mind that some people couldn’t save games on their systems) and also led to frustration on the part of some gamers over the expensive price of the Microsoft-produced hard drives that they have to purchase if they want to upgrade. Making a hard drive internal will make Microsoft’s console equal to Sony’s and will also create a status quo for developers to work with.

Microsoft has stated that they want the Xbox 360 to have a long life-cycle, and hope to push it to nearly a decade long-cycle. If so, the Xbox 360 has another 5 or 6 years left before Microsoft brings out a new console system, and this is a way for Microsoft to extend the life of the Xbox 360 and draw in new customers at the same time.

If the photos are indeed real and show something out of the development of a new Xbox 360 console, perhaps Microsoft ought to also be considering an upgrade to Blu-ray capability. It’s becoming more and more apparent that the PlayStation 3’s disc of choice has significant advantages over the DVD storage option. A Blu-ray can hold significantly more data, and that data storage disparity can be seen in how many DVDs Final Fantasy XIII required for the Xbox 360. The Xbox 360 version of the game required 3 DVDs while the PlayStation 3 version only required one Blu-ray disc. In the future, game publishers may be tempted to bring more exclusives to the PlayStation 3 because of the extra manufacturing cost of creating a multi-disc game for the Xbox 360.

In addition, Microsoft needs to consider the approach Sony is taking to marketing the PlayStation 3. The PlayStation 3 is being marketed as a system that “only does everything.” It isn’t just a game console, it is a full entertainment hub. Despite the fact that Microsoft says they are confident that one of the reasons behind the Xbox 360’s initial successes was the lack of Blu-ray (which kept costs down), the fact is, Microsoft would be well-advised to add Blu-ray capability so that they are at the forefront of movie and data storage technology and so that they don’t allow their competitors a leg-up over them.

As it stands now, the Xbox 360 thrives on it’s selection of titles not available on the PS3 such as Mass Effect and Gears of War. But, when it comes to overall value, the Xbox 360 is losing out. If a customer sees the PS3 that offers Blu-ray capability, online gaming and a solid lineup of exclusive titles sitting next to an Xbox 360 that offers DVD capability, online gaming and a solid lineup of exclusive titles the Blu-ray may be a deciding factor. After all, Blu-ray Disc players can cost well over $100, so the discerning customer who needs both a console and wants Blu-ray to take advantage of his or her HD TV will find no qualm in choosing the PlayStation 3 over the Xbox 360.

Microsoft is heading in the right direction if they are indeed creating an Xbox 360 slim, but if they want to compete with Sony, they need to emulate Sony. Another five years on DVD just won’t work for delivering the highest quality of games, and if Microsoft continues to insist on not including Blu-ray support, the system will suffer in sales as a result.