Not to long ago Microsoft’s Shane Kim spoke about how Project Natal, Xbox’s new motion censor, would be as big as a console launch. Kim might have been hinting at something because according to 1U’P’s sources, Microsoft is planning on releasing a ‘new’ Xbox console and maybe as early as next fall.

During their E3 press briefing, the company debuted Natal to the world. They revealed the unit would simply be an add-on and will work with existing Xbox 360s. However, according to these insiders, Microsoft plans on shipping their new console with Natal. When will this all happen? Well, the sources are suggesting that we should see this rumored Xbox system next fall, and the announcement might be happening as early as GDC 2010, which starts on March 9th.

As for the hardware, the new Xbox system will be nothing more than a upgraded system. Meaning, the technology will be largely the same and the visuals we see today will look similar, when compared to today graphics. However, Xbox 360 games will run better than the today’s Xbox, and the new games which take advantage of the new systems specs will also work with the older 360 model. Basically, this sounds a little bit like Nintendo’s philosophy. Create motion controls and make the system attractive to the casual gamer because of the console’s cheap price tag.

More to come as it develops.