Could Microsoft be planning to unveil a 60GB Xbox 360 at its E3 press conference next week?

It certainly seems that could be the case, according to an intercepted email which appears to be from Microsoft to top retailers GameStop and Blockbuster.

Gamers have often complained at the 20GB model being too small, but the 120GB too big. It seems Microsoft may have come up with something smack bang in the middle to sort out the problem.

The email states Microsoft is launching this bigger model later in the month, and plans to phase out the existing 20GB unit.

The leaked e-mail also states that a stand-alone 60GB hard drive priced at $99.99 will replace the current 20GB hard drive, and the 120GB stand-alone drive will drop from $179.99 to $149.99. Below is a portion of the e-mail published by Xbox Family:

"With the introduction of the 60GB Pro console in July, we have research that suggests it is very important to have a 60GB stand alone Hard Drive to go along with it to allow the consumer a full range of choices and values.

"In late October/early November (exact date TBD but most likely last week in October or first week in November), we will ship the Xbox 360 60GB Hard Drive, tentatively called the 'Xbox 360 60GB LIVE Starter Pack.' This will be an excellent value price at and ERP of $99.99 with an 18% retail margin."

The supposed Microsoft e-mail goes on to paint the move as part of their focus on "choice and value."

Microsoft have chosen to neither confirm or deny the rumours, with one representative saying the company had "nothing to announce at this time."

Heather Snavely, Microsoft's PR director of global platforms, came up with a slightly more imaginative response, stating: "We can't comment on rumors. What I can tell you is that our plans for E3 haven't changed. We've got a lot of exciting news that, unfortunately, you and everyone else will have to wait to hear next week. The truth is, rumors will always be a part of our industry -- it's just one more sign of how eager gamers are to learn how we'll innovate next."

All will be made clear next week.