Aside from the will they/won't they as regards the inclusion of a Blu-ray drive, it's been a while since we've heard an Xbox 360 rumour.

That changes with the news from Taiwan that the company is busy prepping the Xbox 540 - a name apparently generated by adding 360 and 180 - for launch in the autumn of 2009, around 4 years after the 360 launched.

The new Valhalla chip (combined processor and graphics) will enable Microsoft to slim down the console's design, similar to what Sony did with the smaller PS2, and will see a faster, quieter model.

As well as suggesting there will be a "all 65nm" chip refresh mid-summer this year, not something the average consumer will notice as the hardware will remain the same, TG Daily speculates that a Blu-ray drive is not out of the question.

>> News - Blu-ray Xbox denied
>> Via - Electronista
>> And - TGDaily