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shuraiya said:
Is there any reason for Microsoft to release a slim 360? The slim PS3 was pretty much released out of necessity to cut costs and basically shed their previous image. Public perception of the PS brand wasn't as great as it could have been back then. They've even gone as far as to replace the old logo and redesign the PS3 cases. It was partial do over. Microsoft on the other hand has a great public image especially among gamers. What possible benefit could be gained from a slim model. I'm sure they can cut costs without a complete redesign. They're better off with a simple price cut.

Their reputation isn't really that great among consumers thanks to RROD... a "new" 360 could be seen as something of a reset there.  Timing it with Natal could work well with mainstream consumers too, who're used the tiny, quiet, dependable Wii.  Plus you'll likely have good portion of hardcore gamers upgrading, and artificially inflating your userbase figures for the PR wars.