A slim new Xbox 360 2010 model is not completely likely, but Xbox Slim 360 idea is beneficial for MS. With the hardware launches of 2009 out of the way and the PS3 slim off to a decent start, attention switches to what we might expect in 2010. At first glance, predictions of a slimmed down version of the Xbox 360 seem reasonable. As a betting man however, (and thanks to a beach ball on the pitch, I’ve some cash to spare ) I’m banking on that not happening, at least not next year.

Before we delve into why, I should clarify that I’m not suggesting it won’t happen eventually. The economics of the console business dictate that vendors actively work to reduce production costs over their platform’s lifetime culminating in the ability to produce a smaller, cooler unit much more cheaply. Asides from the logistics of shipping smaller boxes around the world the uplift in sales a new hardware release brings is undeniable, just ask Sony. The latter however, had a far greater imperative to get the PS3 slim out the door. Microsoft’s needs are a lot more different than the by-the-numbers analysts are perhaps giving them credit for. It’s arguable whether they need a 360 slim at all, even more so that they need one soon.

Microsoft are a software company at heart, not a hardware one.

This fundamental truth underpins almost everything else. Sony have been in the business of producing consumer electronics for years and have vast resources dedicated to it. The same is not true of Microsoft. They are only in the hardware business in the first place purely out of necessity. As considerable as the war chest of cash held by the Redmond giant might be, it is still inversely proportional to the in house manufacturing expertise in it’s possession and likely at least one order of magnitude smaller in size compared to Sony. As both Xbox Live and the NXE shows, Microsoft prefers to tackle things in software terms where possible. The hardware is usually only a last resort and left to a smaller team who must pick and choose their battles.

Three red lights

Which mean problems like the infamous RRoD can set a smaller team back years. A staggering $1 billion was written off to deal with this issue and even for a company as cash rich as Microsoft, that’s a huge amount of money which likely ate into budgets allocated for hardware R&D. Moreover, once the true enormity of the problem became apparent it immediately became a priority above everything and everyone else, unless you got lucky and had already been shifted over to working on the Zune project. Eventually, not one but two new hardware developments were designed to tackle the problem. The new heatsink design which initially appeared on the Zephyr unit and the Opus board designed to be installed in units sent back for repair. All in all a big distraction, potentially leaving little time for much else in the first couple of years of the Xbox 360’s lifecycle.

Codename leaks

Speaking of codenames, leaks of the motherboard designs Microsoft have been working on for the Xbox 360 have been prevalent over it’s life-time. In addition to RRoD, excessive fan/disc noise, power usage & the ability to crack the device’s security have caused enthusiasts to actively seek out and document later Xbox 360 revisions, a trend with roots which go back to the original Xbox which spawned a dedicated community picking up every snippet of information like a hawk. In recent times however, the small but constant drip of new information has gone quiet. Only the feintest of chatter about the rumoured “Valhalla” board did the rounds towards the beginning of last year and hasn’t been recycled or expanded much upon since. Supposedly a board combining the Xbox 360’s CPU and GPU onto one smaller manufacturing process chip, it would be tailor made for a 360 Slim or at the very least a big cost saving. Significant news in itself so the question is, where is it? It’s difficult to believe Microsoft suddenly got a lot better at keeping these things quiet. What happened?

Project Natal

It might not be quite accurate to say Project Natal ‘happened’. After all, Peter Moore hinted at controller experimentation as early as 2006. The catalyst however might just have been the Wii’s roaring success. It wouldn’t be the most outrageous statement to suggest that Microsoft considers their battle with Sony this generation as a job already well done. At times, they certainly talk like it. If the focus has switched to the Wii, Microsoft surely realised that competing on cost reduction and making a smaller box would not only be a fruitless endeavor (Nintendo would always be way ahead in these areas having made the Wii on older technology and profitable from the start), but also a side issue. The priority needed to be on responding to the Wii remote.

Natal is a massive project for Microsoft getting launch level emphasis and investment. It effectively is the next generation. For it to be a success, it not only needs to work as advertised but also be as cheap as possible for Microsoft to reach the intended audience. There isn’t a bigger priority right now than Natal. Are they throwing resource at a slim model at the same time to go with it or focusing 100% on Natal? My money, is on the latter.

Money where your mouth is

Like all idle speculation, almost everything above can be met with a counter argument. Microsoft would be daft not to make a 360 Slim, they’ve a track record of following Sony’s business model very closely. Having planned for a hardware iteration every year, it’s likely a slim version was at least in the plan. Valhalla might not be dead, even Steve Balmer has made throwaway remarks to a “new” Xbox in 2010.

To put too much emphasis on the latter however is to misunderstand what the Xbox platform is. Philosophically, the platform is LIVE, not the physical box it lives on. Before a piece of hardware even saw the light of day, the original idea was to simply provide an operating system for the PlayStation. Live Anywhere, might have gone AWOL but the emphasis on LIVE being the real platform was very, very clear. Only time will tell, but if the bookies would open up such a market, I know where my money would be.

* Images are of an awesome Xbox 360 laptop mod by Ben Heck whose site you should definitely check out.

Update 25th October 2009: We’ve added a Hubdub prediction market below to get a better handle on what everyone thinks. Thanks for the feedback so far!

Will there be an Xbox 360 Slim released in 2010?