Analyst: Next gen Xbox at E3 2012

Microsoft could potentially unveil its next generation console at next year's E3 expo, according to predictions from M2 Research analyst Billy Pidgeon.

"While Xbox 360 has peaked in some respects, particularly in North America, the system is still selling strongly and penetration potential remains - in Europe overall, and in the young end of enthusiasts as well as the mass market for an extended back half of this cycle," said Pidgeon to IndustryGamers.

"It's in a vendor's best interests to maintain a system's viability as long as possible. On the other hand, should Xbox 360 hardware sales begin to drop off dramatically in Q4 or early in 2012, Microsoft will likely announce launch of a new system at E3 next year," he added.

Responding specifically to rumours that Electronic Arts was already in possession of development kits, Pidgeon did not rule out the possibility: "Vetting the system's basic capabilities with the top third party publishers and developers is a crucial phase of next generation design, necessary to encourage support and to solicit feedback."

EA though has claimed that the rumours have no merit whatsoever. "This story is a total fabrication – 100 per cent not true," said spokesman Jeff Brown.

Related rumours even suggest that Microsoft would reveal, or at least hint at, the new console at this year's pre-E3 conference. Although the story quickly spread amongst fans, most analysts, including Pidgeon, consider it extremely unlikely - especially in light of continuing strong sales of Kinect.

However, some new model of Xbox 360, emphasising the use of Kinect, is considered a possibility.