There is a rumor going around because of a statement made by Shane Kim (Microsoft's head of long-term Xbox 360 strategy). The rumor is that Project Natal may actually be Xbox 720 (aka Xbox 3).
Shane Kim said, "Conceptually, the launch of Natal will be like the launch of Xbox 360. It's going to be that big. We're not just going to ship it when the hardware and software are ready. We have to make sure that there are enough content experiences that are really good. That's similar to how you would think of the launch of a new console. It's got to have a great launch line-up. That's the same thing here."
The bottom line... sounds like people may be making a big deal out of nothing, but considering the recent statements made by big name, third-party developers stating that they've "maxed out" the 360 but not the PS3, it may not be too far-fetched to see Microsoft trying to release another console soon. On a side note, Nintendo bombed with the GameCube so they decided to repackage it with an enhanced controller. Yea, that's right. Nintendo's Wii is essentially nothing more than a tuned up GameCube with a new, interactive controller that was successfully "relaunched". Will be interesting to see how this turns out.
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