The Redmond company is not confirming the rumors, although it has been reported that a Microsoft XNA framework developer may have unintentionally confirmed the HDMI functionality in a company forum for the technology.
Still missing from the rumored unit is a built-in HD DVD drive, say sources. While the company has said it plans to eventually build the technology into its consoles, Microsoft is apparently waiting for production costs to come down before it does so.
“It is interesting that Microsoft hasn’t added the HD DVD drive as a permanent feature,” Dean Takahashi of the San Jose Mecury News wrote of the news. “The format war with Blu-ray is still going on, and that drive would add considerable cost.”
The motherboard of the new Xbox 360 would also be redesigned to take advantage of new 65-nanometer technologies, which would also bring down the manufacturing costs of the console. This could open up the door for a price cut before the holidays, and put pressure on rivals Nintendo and Sony.
Analysts say it is unclear whether or not the other consoles would see a price cut immediately as a result of the new model’s unveiling. However, the addition of IPTV would give the Xbox 360 an edge over the PlayStation 3, which does not have the capability but costs more.