A number of Japanese magazines are reporting that Microsoft is moving ahead with plans to release a redesigned Xbox, dubbed "Xbox 1.5", which will come in a significantly smaller case than the original model.

Weekly magazine WAM has reported that the new system will be launched alongside the MMORPG True Fantasy Live in Japan later this year - a move which would make sense, given that True Fantasy Live is one of Microsoft's key hopes for invigorating sales of the Xbox in that territory.

Also reporting on the new Xbox is respected Japanese games magazine Dorimaga, which speculates that the forthcoming hardware revision is the reason why Japan has not seen an Xbox price cut in the last few months - with the price of the old hardware expected to drop when the new version appears on the market.

Many commentators fully expected Microsoft to unveil a revised version of the Xbox hardware at E3, following long-running criticism of the bulky casing of the console. It's not expected that any changes will be made to the internals of the system, however - this is, by all accounts, a purely cosmetic makeover.

Source : GamesIndustry