Updated, 1 June 2011: An analyst has said he wouldn't be surprised if Microsoft announced the next Xbox in 2012, observing that the Xbox 360 "has peaked in some respects". You can watch the new Xbox launch livestream right here on PC Advisor.

Speaking to IndustryGamers, Billy Pidgeon of M2 Research argued that an announcement at the E3 gaming show next year was quite plausible - even likely, depending on sales of the Xbox 360.

"It's in a vendor's best interests to maintain a system's viability as long as possible. On the other hand, should Xbox 360 hardware sales begin to drop off dramatically in Q4, or early in 2012, Microsoft will likely announce launch of a new system at E3 next year," Pidgeon said.

E3 envy

This is a bit of a long shot, but could hardware envy force Microsoft's hand into leaking some details at E3 2011 - next week, in other words? As CVG points out, with Nintendo parading its Project Cafe and Sony talking about the NGP, Microsoft is going to be the odd man out in hardware terms - and it's hardware that grabs the most column inches.

"If the platform holder were to suddenly reveal its next console it would blow the convention hall sky-high with gaming's best-kept secret and nullify the competition rather than potentially shuffling around in its shadow," the site muses.

Updated, 12 May 2011: 

When is the next Xbox launching?

'Nextbox' rumours have been swirling around the games industry this week, after a claim - which was subsequently denied - that Microsoft is well into development of its next Xbox console and will be able to unveil it at E3 in June.

This follows the recent announcement that Nintendo will be showing off the successor to the Wii - currently known as Project Cafe - at the event, and then launch it next year. Microsoft would understandably be reluctant to give up so much E3 news coverage to its great rival.

“Why let Nintendo steal the thunder in June [at E3]?" asked Develop's source. "It doesn’t want to lose momentum. That’s why I think Microsoft is rushing to make an announcement at E3.”

Being trumped by Project Cafe would be particularly galling for Microsoft because everything points to the Wii 2 (or whatever it's called) being more powerful than the Xbox 360.

That might not seem so surprising - the Xbox 360 has been around since 2005, after all - but Microsoft and Sony have traditionally had the hardcore gaming market to themselves, with Nintendo's less powerful Wii console taking the (actually much larger) casual and family market which it helped to expand. But a rapid turnaround of Project Cafe could see Nintendo not only get a head start on its usual fanbase, but allow it to lure a few processing-speed-obsessed hardcore gamers who would never have considered a Wii 1. (Although personally I'd add that it will take some serious perception-altering marketing - and a name that isn't 'Wii 2' - to make that happen. Wii is a dirty word to many hardcore gamers.)

The story was that EA had an early prototype of the Xbox 360 2 - or Xbox 720, or whatever - sitting around on its desks for software development purposes. The source claimed the prototype was still contained in a PC shell, so Microsoft clearly isn't likely to start selling the console tomorrow, but it appeared to be advanced enough to give programmers a decent idea of what it will be capable of.

But EA promptly hit back, saying the story was "a total fabrication - 100 percent not true". (Develop says its source stands by the story, whatever that tells us.)

GamePro Advisor

Timing of the next Xbox

Microsoft has said in the past that it foresees a 10-year cycle for the Xbox 360 (which launched six years ago, of course), and the console is still making plenty of profit, partly thanks to the rejuvenating effects of the Kinect launch, and updates on the design and spec every few years. One analyst has said he is baffled by rumours that Microsoft would launch the new console now, when it has so much momentum in the market.

"The Xbox 360 has incredible momentum and it would baffle me as to why they would make a new hardware announcement at E3 and announce its launch by the end of 2012," EEDAR's Jesse Divnich told Industry Gamers. "I think we can all agree that new hardware is due, but 2012 may be a tad bit early to launch a true new piece of hardware. But I've been wrong before."

New recruits at Microsoft: A clue?

Another thing that Develop used as evidence of Microsoft's progress on the Nextbox related to job positions that Microsoft has been advertising for.

Earlier this year Microsoft advertised new job vacancies such as Graphics Hardware Architect and Performance Engineer for the Xbox Console Architecture Group. The new staff will be “responsible for defining and delivering next generation console architectures from conception through implementation", the company said.

Keep an eye on this page, which we'll update with all the stuff we hear about the next Xbox, from hard fact and official announcement to wild speculation.