Microsoft's 'Xbox Next' tipped for 2013 launch

Numerous rumours regarding Microsoft's next-generation games console - codenamed the Xbox Next, though sometimes jokingly referred to as the Xbox 720 - point to a 2013 launch date, suggesting Sony's PlayStation 4 won't be far behind.

The Xbox 360 console, Microsoft's second entry into console gaming following the launch of the original Xbox in 2001, is an impressive beast - but one which is showing its age. Launched in 2005, the system will celebrate its sixth birthday in November - and in those six years much has changed in the gaming market.

While the Xbox 360 added offficial support for 720p - and later 1080p - high-definition TVs, it lacks the horsepower to render games internally at these resolutions. It's hardly alone in this - the majority of titles for Sony's rival PlayStation 3 console render at a 720p maximum, missing the full 1080p resolution most HDTVs are capable of - but indicates that Microsoft's next effort will require a serious performance boost.

The Xbox 360 also suffers in another way: game storage capacities. While Sony's rival PlayStation 3 enjoys a Blu-ray drive capable of holding up to 50GB on each disc - although suffering from a painfully slow access time that requires developers to store common assets in multiple locations on the disc - the Xbox 360 uses DVD discs that can only hold around 8GB.

The result: the appearance of games include LA Noire, Mass Effect 2 and the upcoming Battlefield 3 which require multiple discs on the Xbox 360 while only needing a single disc on the PlayStation 3.

While it's easy to take this information and suggest that Microsoft will be adding Blu-ray support to the Xbox Next, there is another possibility: the ditching of optical media altogether in favour of digital distribution.

It's a mechanism which is proving popular with PC gamers: services like Valve's Steam allow gamers to get the latest titles without ever leaving home, and a clever pre-load system lets them download the content ready for instant play come launch day.

Microsoft already plays with digital distribution: the current Xbox 360 platform allows for small 'Xbox Live Arcade' titles to be downloaded, and the company recently introduced the ability to buy selected Xbox 360 titles for download directly on the console.

As a result, it's not hard to imagine Microsoft taking a similar path to Sony's ill-fated PSPGo hand-held console, ditching the optical drive in favour of a download-only system.

There are three factors that point away from such a plan, however. First is the simple fact that as game sizes increase, so does the time required to download the content. With the latest figures from telecommunications watchdog Ofcom suggesting that average UK broadband speeds are around 6.2Mb/s, a 25GB game would take around 10 hours to download - and for many users would tip them over monthly usage caps.

Second is the PSPGo itself: although the console offered several advantages over the original PlayStation Portable, buyers were less than enamoured with the concept of download-only gaming while retailers were faced with a loss of revenue as buyers bought the hardware but didn't come back for games.

The final factor is backwards compatibility: to make up for a somewhat limited launch library, the Xbox 360 includes compatibility with a selection of the most popular games for the original Xbox. The Xbox Next will almost certainly offer the same for the Xbox 360, for which it will require a DVD drive at the very minimum.

Microsoft is keeping its cards close to its chest, appearing unwilling to tip its hand to rival Sony. The Xbox 360 was the first major seventh-generation console, launching a full year before Sony's PlayStation 3, giving Microsoft a major head-start in the market.

With Sony working on the PlayStation 4, it's clear Microsoft will want to duplicate that lead - but rumours point to a 2013 launch, making it likely that Sony will ensure its next-generation schedule matches that of its rival.

The clearest indication of a 2013 timeframe for eight-generation console hardware comes courtesy of industry publication Develop, which has collated hints from "multiple sources across the industry" and drawn the conclusion that the device will be unveiled at the Electronic Entertainment Expo in 2013 in time for a Christmas launch.

Develop also claims that Lionhead is working on a launch title dubbed Fable Next, that Electronic Arts has early prototype Xbox Next hardware already - a claim EA has outright denied - and that publishers are already working on PlayStation 4 titles.

Microsoft, unsurprisingly, has declined to comment.