You guys ready for a crazy rumour? The fellas over at 1UP chatted up what can be expected of Project Natal when it (possibly) launches sometime next year and word has it that it won’t just be any old peripheral release. No sir! Natal may in fact be a relaunching of the Xbox 360 itself, with a new title (they suggest Xbox Natal, I suggest Xbox Please Don’t Do This). There’s a chance the relaunched console will not only come with the camera but also incorporate slight hardware upgrades to allow developers to take advantage if they so choose. It won’t be a generational jump, but rather something similar to what Nintendo did.

“It’s actually not that unlike what Nintendo did with the Wii, where it essentially took the GameCube hardware, stuck in motion controls, and successfully relaunched it,” writes Sam Kennedy. All I see here is the potential to segregate the market if Microsoft went through with this. It’ll create a system of haves and have nots unless they release Natal itself as a standalone product, which a product and brand relaunch does not suggest.

Kennedy concludes, “So when would we first hear about this new Xbox console? Our sources point to next year’s Game Developer’s Conference as the target for its unveiling and Fall 2010 as the target for release.”