Microsoft is planning a major Xbox 360 announcement on Wednesday but it is keeping quiet about what it will be.
Rumors suggest that the company is planning a new sexy looking black machine which will be a revamped "Elite" version of the games console, with new features such as a larger hard disk drive and a built-in HDMI connector.

The move is expected to be a counter to the launch of the PS3 which while bombing quite badly at its Euro launch last week is expected to make inroads into Microsoft's market share.

The source for all the rumours is San Jose Mercury News journalist Dean Takahashi who wrote two books on the Xbox and the Xbox 360 and is believed to have good sources with Microsoft.

The new machine will have a 120GB hard disk drive and an HDMI connector. Initially it will go on sale in limited quantities for around $US479, but it is fairly likely that it will become a mainstay of the Xbox 360 range once a marketing buzz is created for it.