Xbox 360
Xbox 720 with Cloud storage? Microsoft

Microsoft will announce the new Xbox - tipped to be called 'Loop' - at the Consumer Electronics Show in Las Vegas in January.

The console - previously dubbed the Xbox 720 - will be officially announced at the CES show in Las Vegas, which kicks off on January 10, according to French site Xboxygen, which cites an "anonymous source close to Microsoft."

The website claims that Microsoft has two groups working on the console; one called 'Infinity' working on the hardware, and another called 'Loop' in charge of software development. This contradicts previous rumours that stated the console would be called Loop.

Also stated by Xboxygen is that the new Xbox will have a six-core processor with an AMD graphics card and 2GB of RAM.

Rumours earlier this week claims that the Xbox Loop would be smaller and cheaper than the current 360, while others suggest that the console will feature cloud gaming, which means processing would be done on Microsoft's servers, rather than on the console itself.

This would explain the smaller size and lower price, but cloud gaming requires a faster, reliable internet connection, and doesn't provide Microsoft with the opportunity to sell new consoles in the future, as the hardware would theoretically never become out-of-date.

A release date for the next Xbox is unknown, with speculation ranging from Christmas 2012, to late 2013. The Xbox 360 was launched for the Christmas season of 2005 and consoles often have a ten-year lifecycle. This means the console is currently only half-way through its theoretical lifecycle.