Analyst: Xbox 360 successor could come in 2012

The Xbox 360 will turn seven years old this year, and it’s time to start seeking a successor.

According to analyst Billy Pidgeon, Microsoft’s next console, which some are unofficially calling the Xbox 720, should be announced in 2012.

“While Xbox 360 has peaked in some respects, particularly in North America, the system is still selling strongly and penetration potential remains – in Europe overall, and in the young end of enthusiasts as well as the mass market for an extended back half of this cycle,” Pidgeon said in an interview with Industry Gamers.

Nintendo plans to unveil a successor to the Wii next month at the annual E3 trade show, and it’s expected to steal the show. There are rumors circulating about a surprise Xbox 720 reveal, but there’s a lot of doubt about the validity of those claims.

This current console cycle is very different than previous ones because of the emergence of deep online integration, allowing console manufacturers to update their systems in ways never before possible.

As a result, the Xbox 360 has managed to live on for more than six years without even a hint of a successor – something the video game hardware market has never seen.

However, even with the “future-proof” nature of online firmware updates, the Xbox 360 is rooted with technology from 2005, and still faces limitations such as only being able to run DVDs instead of Blu-ray Discs, and being stuck with the processing power used in the original 360 units.

“It’s in a vendor’s best interests to maintain a system’s viability as long as possible. On the other hand, should Xbox 360 hardware sales begin to drop off dramatically in Q4, or early in 2012 Microsoft will likely announce launch of a new system at E3 next year,” Pidgeon noted.