E3 Sneak peek: New Xbox (from: Paul Thurrott)

CNN Money:
Calling this year’s E3 the biggest video game show in the industry’s history might sound like hyperbole run amuck. For once, though, it appears the hype might be justified.

When the show (formally named the Electronic Entertainment Expo) kicks off May 18, more than 400 companies will cover more than 540,000 square feet, showing off new games, new consoles and new gaming gadgets.

Microsoft has the most riding on this year’s show. Three days before it officially begins, the company will finally take the wraps off of its next generation Xbox (which will almost certainly be named Xbox 360). Microsoft hopes the new machine will help it unseat Sony from its long-held industry leader position, which won’t be an easy feat.

While there are still plenty of mysteries surrounding Xbox 360, a few details have leaked out. All games will be optimized for high definition televisions. All will have some online functionality. And the graphics engine will be more powerful than anything on the market today.

A hard drive is still a possibility. And Microsoft (Research) is working hard to make the machine backward compatible with current Xbox games, though that hasn’t been easy due to a change in hardware vendors.

Things like price and launch date have been kept under wraps. Expect those to come right before the show.

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