Rumor: Natal part of new Xbox console, due Fall 2010

Remember when Shane Kim acknowledged that the Project Natal launch would be more like a console launch than a simple peripheral launch, saying, "Conceptually, the launch of Natal will be like the launch of Xbox 360"? Well, 1UP is reporting that, if its sources are correct, the Natal launch will be a new console launch! "Microsoft will not only release Natal as an add-on for the Xbox 360, it will come standard with the next Xbox console," 1UP writes. "Yes, there will be a new Xbox console next fall."

Lest you think this is going to be a simple bundle, Natal camera included, 1UP "heard it will be considered a new platform and carry a new name (Xbox Natal?)." Suddenly, we're reminded of the rumored Valhalla chipset, which would combine the 65nm CPU and 65nm GPU into one superchip, with reduced cooling and power demands. With that, Microsoft could make a smaller – more Wii-esque if you will – Xbox console, perfect for the mainstream consumer.

Incidentally, that chipset is expected sometime around 2010 which is precisely when 1UP pegs the new console's launch: "sources point to next year's Game Developer's Conference as the target for its unveiling and Fall 2010 as the target for release." So, a slightly upgraded Xbox 360 coupled with the Natal camera, targeted towards your parents? Just because we're leaving the speculation there, doesn't mean you have to. Sound off in the comments!