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[UPDATE] Corporate spokesman Jeff Brown told IndustryGamers, "This story is a total fabrication – 100 per cent not true."

According to a Develop Online article EA already has their hands on the basic hardware build of the next Xbox. (I refuse to call it the Xbox720.) 
EA is rumored to be working on the Alpha software that will "over-take" this generation of gaming. 
Develop reports that the hardware was shipped in a PC shell that hid the inner workings; “Quite often when new consoles come around they’re packaged into a PC shell, but actually what’s inside is an entirely new console,” a senior, trusted, well-placed source said.

The Next Xbox has been rumored ever since 2006 when the 360 launched. Logos, prototypes, and rumors litter the interweb but only a select few shareholders know the details about Microsofts third console. 

What I Would Like to See in the Next Xbox Console:
  • Blu-ray Disc Drive. There was a time when HDDVD was it, but Blu-ray won the battle. Not for graphics and ease but because of the sheer amount of space thats on each disc. L.A. Noire takes up 3 DVD discs and only 1 blu-ray.
  • Built in PSU. That damn power-brick is annoying, admit it. A new smaller PSU (like the ones rumored to be with the "Valhalla" motherboard X360s) would be much better and cause less hassle.
  • Ability to play all games at 1080p. Its just the new standard.
  • WiFi. Yes yes yes the 360Slim has this and it works great, but sometimes you have to remind people about the great things.
  • A Web Browser. XBL is fantastic but a real browser would be extremely useful and gamer-friendly. The PS3 has this and utilizes it, Xbox gamers are envious.
  • Cloud Support. The ability to access your PC(pics, vids, files) from your console and vice-versa. Yes The Windows Media Center exists but it could be redesigned and better integrated.

There are rumors that Microsoft will announce the plans of a new console at E32011, but many sources are calling a bluff on this one. The next console from Microsoft is expected in 2012.