Microsoft may be planning to launch a new Xbox console next autumn that bundles Project Natal as standard and features minor technological improvements.
The console will be considered a new platform and so be given a new name, according to 1UP's report. It's not clear what technological upgrades there will be, but future games can apparently take advantage of them.
All existing 360 games will be playable on the new machine.
Microsoft's Shane Kim last week likened the arrival of Project Natal to the launch of Xbox 360 itself, harping on about a solid "launch line-up" of games.
The Xbox 360 will be five years old next autumn, when the alleged Natal-based console will launch.
Head over to our Project Natal gamepage for all we know so far.