According to a report, the next Xbox is already in production in Austin, Texas.
Flextronics are apparently constructing the new hardware for Microsoft (the company are working on current Xbox hardware, and manufactured the original Xbox), according to the report from IGN.
It is speculated that the first batch of machines (codenamed Durango) to come off the production line will be dev kits, giving designers a chance to start working with the new tech ahead of a potential 2013 launch.
When questioned by IGN, Microsoft said:
"Xbox 360 has found new ways to extend its lifecycle like introducing the world to controller-free experiences with Kinect and re-inventing the console with a new dashboard and new entertainment content partnerships. 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."