Microsoft has confirmed the existence of the Xbox 360 slim (not its official name), a new SKU of the console that will include built-in wireless N, additional USB ports, touch-sensitive buttons and a proprietary 250GB hard drive.
Neither the new hard hard drive or the power supply will be compatible with older models of the Xbox 360, while support for Memory Units appears to have been dropped entirely. Noticeably absent is a Blu-Ray drive, leaving the next-generation optical media the sole domain of Sony in the console space.
It is believed that the new console is based around the motherboard codenamed Valhalla design, which integrates the IBM Xenon microprocessor, ATI Xenos graphics and memory controller hub onto one chip. The glossy black SKU is pitched as near-silent, and also includes a special socket for the Kinect motion controller.
The new version of the console will be available later this week in the US, for the price of $299. Those wanting the complete new Xbox experience will need to seperately purchase a Kinect add-on, which may sell for $149. Bundles will doubtless be made available.
Remaining stock of the outgoing Xbox 360 Arcade and Elite hardware will both be discounted, to $199 and $249 respectively, and there are rumours that a $199 360 slim SKU may also be released.
UPDATE: Microsoft has confirmed to GamesIndustry.biz that the new model will be available in the UK and Europe for the same price as the existing Elite edition (£199), from July 16 onwards.