Microsoft planning an 'Elite' Xbox 360

We heard rumors a couple of months ago that Microsoft was working on a second-gen Xbox 360 with HDMI video output and a larger hard drive. Well, the folks at Engadget have received word from supposedly reliable sources that this "second-gen" Xbox 360 will initially be a limited edition high-end model dubbed the Xbox 360 Elite.

The site says this Xbox 360 Elite will have a 120GB hard drive, HDMI video output, a black case, new packaging, and a $479 price tag. The console is said to run cooler than current Xbox 360s, although Engadget's sources don't know whether Microsoft will be using the 65nm die-shrunk version of the Xenon processor that Chartered expected to start producing this quarter. Only around 200,000 Xbox 360 Elite consoles will be made, after which Engadget says the $399 Xbox 360 Premium will inherit the Elite's internals. That transition is currently estimated to happen by the late summer or fall.

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