GameHoof.com

Ever wonder why Microsoft hasn’t released an HDMI cable for the Xbox 360, or whether the AV port was really capable of digital out? Well, here’s your answer: engadget landed pictures of what appears to be the second Xbox 360 — the Xbox 360 v2, if you will — codenamed Zephyr. (The original Xbox 360, if you recall, was codenamed Xenon.)

According to Engadget, Microsoft has been busying itself with a new version of the Xbox 360. The team has snapped some sneaky pics of the new console that was previously only thought to boast a die shrink for its Xenos GPU and tri-cored IBM CPU. This provides lower power, less heat and hopefully a better console life-span.

It appears that Microsoft has decided it needs to keep up with the Jones’ (Sony) and integrate a HDMI port as well as the standard analogue A/V port. Not pictured is the all new, larger 120GB hard disk (twice that of Sony’s 60GB PS3) that may or may not come with the package. This means users can use the Live Marketplace to download a lot more stuff without having to resort to deleting things left, right and centre – a problem made all the more worse since Microsoft has starts its movie, TV and music download services.

The question is, despite the new console features, will it require people buying a Zephyr to have a HDMI/HDCP enabled TV to watch HD-DVD and High-Definition content? Up until now, thanks to the recent Xbox Live update, Microsoft has enabled people to use the analogue component and VGA connections to watch their movies in HD, essentially DRM-free. Could this mean more people seek out the version 1 console in DRM-free preference?

There’s no word yet on whether or not the new HDD will come inside the new bundle, but its regardless a welcomed change for Xbox enthusiasts. One much needed upgrade that has no word of actually coming to light is an internal HD-DVD drive. It’d make the package a lot cleaner, but appears to have missed the boat on this revision.

Will this make the version 1 consoles cheaper since it offers fewer options? Despite the fact the new console should be cheaper to make on a 65nm, including HDMI means Microsoft has to pay royalties on every console sold. Add into the fact it will need a separate firmware to the version 1 consoles and you’ve increased the work, and cost, on your development team.

The 65nm process is said to be delayed for several months, so it may be until 2nd or 3rd quarter before we can get a hold of it. That wait might mean Sony will get a better foothold on this market before Zephyr sees the sales floor…providing, of course, that the PS3 can get some games out worth playing.

Prices are expected to remain the same on the console to keep the competition with Sony and Nintendo stiff, and these changes are expected to hit the shelves soon. No official word has been released yet, however.