MICROSOFT is expected to go head-to-head with Sony in the battle for the huge gaming console market when it unveils its new Xbox next month.
The computing giant sent out invitations this week to a May 21 event at its campus in Redmond, Washington, promising to reveal a 'new generation' console.
More than 70 million Xbox 360 consoles have been sold since they were released in November 2005.
The internet rumour mill is running wild about what 'Xbox 720', as it being dubbed, may feature.
Some say it will include an 'always on' online function, others a blu-ray disc player to match Sony's Playstation.
There's also speculation it will feature killer apps for watching streaming TV.
Sony announced its PlayStation 4 system in February, speaking for two hours in New York, without having the device to show off.
There's talk Microsoft and Sony may unveil their new consoles at the premier E3 videogame conference in Los Angeles in June.
Both consoles are expected to hit the shelves in time for Christmas this year.
Techradar reports that the second version of the Kinect controller will sit at the heart of the new Xbox.
"A console built around motion detection has lots of promise and it seems highly likely that this is the direction Microsoft is taking, given the way it's currently pushing Kinect hardware and software,'' the site said.
However hardcore gamers are expected to stick to the existing 360 controller given how accustomed they have become to it.
There's even speculation there may be a mini version of the Xbox with the ability to stream Xbox 360 games from the cloud.
Given the Australian gaming industry alone is said to be worth $1.5 billion, there's plenty at stake for all players.
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