While there isn’t any official confirmation on this just yet, speculation is that Microsoft could be gearing up to unveil an Xbox 360 Slim at E3, which is just around the corner. With the recent release of Sony’s PlayStation 3 slim, it wouldn’t be too surprising if such a move did materialize, as both parties do compete with each other quite strongly, especially since the PlayStation Move and Project Natal motion sensing controllers are just around the corner. Hopefully Microsoft won’t be removing any important/killer features of the Xbox 360 in order to allow for a slimmer form factor.
Note: Picture is just a mock-up.