Microsoft working on second-gen Xbox 360?

The folks at Engadget have gotten their hands on a picture of a purported second-generation Xbox 360 console. Code-named Zephyr, the console will supposedly feature HDMI output—just like Sony's PlayStation 3 consoles—as well as a cooler-running 65nm processor and a 120GB hard drive. While unconfirmed, this rumor fits together with an announcement made by Chartered Semiconductor over eight months ago. Chartered said it had entered an agreement with Microsoft to produce Xbox 360 processors based on a 65nm silicon-on-insulator process, and that production of the chips would start in the first quarter of 2007. According to Engadget's source, users will be able to get their hands on Zephyr consoles "soon." Thanks to TR reader Evan for the tip.
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