TechRadar has a wrapup of some of the rumours regarding Microsoft's next-generation Xbox console. The site speculates the "Xbox 720" - or whatever it will be called - may arrive in 2011 and will likely feature a Intel processor, a Blu-ray drive and massive amounts of storage.
We've already speculated about what Microsoft might be planning for its third Xbox – 16 or 32 processing cores (including onboard graphics), 8GB of DDR memory, broadband connectivity and a hard disk that delivers terabytes rather than gigabytes of storage space.
Assuming that Microsoft isn't going to dumb-down the next Xbox in favour of a Wii-style family console, the next-generation of processors could give the Xbox 720 the muscle of a turn of the millennium supercomputer. A return to Intel technology might also be on the cards.
Because by 2012, Intel plans to have launched the 22nm die shrink of the Sandy Bridge architecture – that's the next architecture after Core i7 (aka Nehalem). According to TechRadar's resident chip-geek Jeremy Laird, this should see CPUs with at least 16 cores, each with two threads for 32 logical processors. We might even see chips with as many as 24 or 32 cores.
Graphics-wise, the current trend on the PC side is towards outsourcing more of the physics and AI work to the GPU. So a contender for Xbox 720 inclusion might be Intel's Larrabee processor.
You can read more over here but I'd take it with a grain of salt as the next Xbox 360 is still many years away from us and a lot can change in that timeframe.