What is It? You'll have to wait until E3 to find out what Microsoft has in store.
"And it's on," Microsoft spokesman Major Nelson proclaims, as he sticks a timer on his blog and tells us all to wait for E3. Would you like to know what It is? So would I, and so would we all, but Major Nelson's smart enough to know that keeping his mouth shut is enough to get the guessing game going.
The near-universal assumption has been that It will be Durango - or Infinity, if you'd rather - the next-gen Xbox 720 Microsoft console that's been rumored to be on the horizon for some time now. However when Durango poked its head up previously, Microsoft whacked it down again, claiming that Xbox Live news had been taken out of context. Examples of the Durango system have appeared on Ebay, and there have been pictures, but as to whether or not the E3 announcement Major Nelson is touting - presumably Xbox-related, since Major Nelson is on the Xbox team - will in fact be the next-gen console ...
Let's face it: we know nothing more now than we did before, except that Microsoft intends to make a fairly important announcement at E3. What is It? You'll find out in June.