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Microsoft is manufacturing its Xbox 360 console, if you believe the good folks over at IGN.

The gaming site alleges Microsoft is, at the least, manufacturing a developer version of the console.

With the current Xbox 360 reaching maturity, a slowing down of sales in the gaming market and a new console coming from Nintendo, Microsoft will be encouraged to deliver a new Xbox console.

IGN claim the Xbox 720 is being assembled in Austin, Texas by Flextronics, who are responsible for the manufacturing of the original Xbox and its 360 successor.

“Prior to reaching the manufacturing stage, Flextronics created a new testing group separate from the rest of the company,” explained the report on IGN.

“This team was solely dedicated to comprehensive marketing, software, and hardware tests of the next Xbox. With that activity concluded, Flextronics started building the hardware.”

Microsoft met the report with the traditional “we don’t comment on rumour or speculation,” but this time threw in claims that the Xbox is still relevant thanks to updates.

“Xbox 360 has found new ways to extend its lifecycle like introducing the world to controller-free experiences with Kinect and re-inventing the console with a new dashboard and new entertainment content partnerships.

“We are always thinking about what is next for our platform and how to continue to defy the lifecycle convention.”

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