Though Microsoft's Xbox 360 models shipping in the coming months will contain a more efficient 65-nanometer processor in their motherboards--codenamed Falcon--the successor to this model is already in the works, according to San Jose Mercury News game guru Dean Takahashi. The new motherboard is codenamed Jasper and will pair the 65nm IBM microprocessor with a 65-nm ATI graphics chip as well when it's included in Xbox 360s starting next August.

For consumers, Takahashi speculates Jasper could mean another price cut, as the production of Falcon-including consoles this fall was paired with a price cut on all 360 models. For those worried about overheating issues, the Jasper motherboard should be an improvement even over the Falcon model as far as heat output, making problems down the road less likely.

Of course, yearly price reductions on consoles have been common in prior generations, so the cost reductions on Microsoft's part may just push the company's game division toward greater profitability if it achieves its goal of staying in the black during the current fiscal year.