Forget the PS3 Slim. How about a slim Xbox 360?

The PlayStation 3 Slim might be on its way to store shelves, but a thinner version of the Xbox 360 might be the refresh Microsoft needs to stay ahead of Sony.

Over the past few months, much of the talk in the video game industry has surrounded Sony and its rumored PlayStation 3 Slim . The product, if it exists, promises to be smaller and, more importantly, cheaper.

Xbox 360
This console needs to slim down, too. Microsoft

I'll be the first to admit that I'm excited about the possibility of the Slim hitting store shelves. I've called on Sony multiple times to drop the price of the PlayStation 3. I believe that it's the key to Sony staying relevant during this generation of game consoles.

But as the PS3 Slim kept us guessing, a report hit the Web on Wednesday claiming that Microsoft might be planning to ditch the Xbox 360 Pro in favor of offering just two Xbox 360 models--the Arcade and the Elite. Great. But what about a refresh?

The Xbox 360 is a beast. It's huge. Its DVD drive is extremely loud. And its power supply is both big and heavy.

The Xbox 360 is also not nearly as reliable as competing products. Since its release, we've been inundated with story after story about the "red ring of death"--an issue that occurs when three red rings around the Xbox 360's power buttons start flashing, indicating that the console is inoperable and will need to be shipped back to Microsoft to have it fixed.

The number of reported RROD instances has dropped in recent months , but it has left Microsoft with a black eye from which it has yet to recover.

So as Sony improves its hardware offerings, I think that it's clear that Microsoft needs to do the same. It needs a slim Xbox 360.

Why it's necessary
I think that a slim Xbox 360 would help solve almost all of Microsoft's problems. It would potentially fit nicely into existing home theater set-ups. If it lived up to its name, the Slim would also ditch the power brick. Its new power supply would be smaller and much more manageable. Those two updates alone would make many current Xbox 360 owners happy.

But it goes beyond that. A slim Xbox 360 can be Microsoft's "do-over." It will address the issues the console has experienced, like that awfully loud DVD drive. It will also fix the Xbox 360's failure issues that just don't seem to go away. More importantly, it could address one of the console's biggest shortcomings: a lack of an HD drive.

Yes, I believe that a slim Xbox 360 should feature a Blu-ray drive. I know that it would be like giving money to the enemy, format backer Sony, but given Blu-ray's rise in popularity this year, I don't think that Microsoft has much of a choice. Until streaming HD content has reached critical mass and entered millions of homes, Blu-ray is still the leading, next-gen home entertainment format.

Although we can currently access streaming content through the Xbox 360, it's not enough. A Blu-ray drive allows Microsoft to fend off Sony's core argument, which states that because the PlayStation 3 has a Blu-ray drive, it's worth its $400 price tag. It's a valid argument. It's also an argument to which Microsoft, without a Blu-ray drive in its Xbox 360, doesn't have an answer. That's unacceptable.

Looking ahead
At this point, I have no doubt that Sony will be releasing the PS3 Slim sometime in the near future. It makes perfect sense for the company, since it's trying desperately to regain lost market share.

Microsoft should follow suit. The Xbox 360 is a great console. I enjoy playing games on it. But it's not perfect. It's in desperate need of a refresh. And a slim Xbox 360 might just be the way to make more consumers happy. More importantly, it could help Microsoft fend off Sony's rise in the market if a PS3 Slim is released.

Do you have any features and fixes you would like to see in a redesigned Xbox 360? Let us know in the comments below.

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