Microsoft's Xbox 720 in Manufacturing Stage?

Microsoft's next-gen game console and successor to the Xbox 360 - the Xbox 720 - is apparently in the manufacturing stages, according to a report by IGN. The next Xbox code is reportedly being developed at the Austin, Texas branch of Flextronics. This is the same electronics company currently assembling Xbox 360 hardware, and is the manufacturer of the original Xbox.

Apparently the company earlier created a testing group dedicated to studying the software and hardware components of the 720, as well as marketing plans. Production, we belive, began after these results were analysed. However, before we get excited, we should remember Microsoft clearly said they would not debut the console at E3. Therefore any report about manufacturing of the Xbox 720 likely only relates to development kits - created specifically so game designers know what they're working with.

"Xbox 360 has found new ways to extend its lifecycle like introducing the world to controller-free experiences with Kinect and re-inventing the consoles with a new dashboard and new entertainment content partnerships. We are always thinking about what is next for our platform and how to continue to defy the lifecycle convention. Beyond that we do not comment on rumours or speculation," said Microsoft in a statement.

Cost

According to an earlier IBTimes UK report, Microsoft could launch a $99 Xbox 360 bundle next week. However, we do not expect that to be any indication of the 720's possible pricing.

"The model for next gen is interesting. It allows the hardware manufacturer to disguise the price of the hardware by bundling with an expensive service offering, not unlike the iPhone that retail for $499, but which costs only $199 with a two-year, expansive data plan," said analyst Michael Pachter.

"I think this could be a long-term strategy. It works with phones and tablets so why not game consoles? I definitely would not be surprised to see Microsoft offering an Xbox Live partially subsidised Xbox 720 when it comes out and this could have significant interest from hardcore gamers that are upgrading to the next console and would have likely subscribe to Xbox Live anyways. Consumers like it because they save money on the hardware and Microsoft likes it because it gets people locked in for two years," said Mike Olsen, an analyst at Piper Jaffrey

Launch Timing

Microsoft has already ruled out either an E3 or a general 2012 release. Therefore, we could be looking at a 2013 Christmas release, according to reports that have Microsoft discussing options with internal partners.