A new report from sources close to IGN say that Microsoft's next generation console is currently in the assembly stages at previous Xbox manufacturer, Flextronics, in Austin, Texas.
But don't count on an E3 reveal from Microsoft just yet. IGN is quick to point out that these are just dev kits, created to show developers what they'll be working with when the final console design is ready for mass-market.
IGN reached out to Microsoft for comment, and strangely, they left a reply basically confirming continued work on new products, but then ending it with the usual 'no comment on rumors' malarkey.
We are always thinking about what is next for our platform and how to continue to defy the lifecycle convention. Beyond that we do not comment on rumors or speculation.
'Tis just a rumor, though. However, it's safe to say that both Microsoft and Sony are both preparing new consoles for the market, both of which we don't believe will be ready until holiday 2013 at the earliest.