Rumors over the last couple of days suggest that Crytek is apparently already hard at work building a new version of their engine for what most are calling the next Microsoft console, or Xbox 720, if you will. Sources say that Microsoft has already decided to move forward with their target to be an unveiled at E3 in 2012 which is expected to once again beat Sony to market.

Crytek has been working with Microsoft more recently, and as part of the work they are doing on moving their engine to DirectX 11, they are also preparing Timesplitters 4 as a showcase title for the Xbox 720 console. Timesplitters was acquired with the company’s acquisition of Free Radical way back in 2009, and since then Crytek has been peppered over and over again as to whether there would be a Timesplitters release now that Crytek owned the IP.

A number of other sources seem to indicate that sources within Crytek have confirmed their work on the new engine for the console; but we believe that it is doubtful that they yet have hardware, as it is unlikely that the specifications for the console have yet to be finalized. In addition, the suggestion that they are using DirectX 11 indicates that, much like DICE’s Frostbite 2 engine, Crytek is using the PC as the development platform with the plan to move the code over to the 720 at some point later; which suggests that the 720 will have a feature set that is similar to DirectX 11.

Some sources that we have spoken with seem to take this entire suggestion with a grain of salt. While these sources freely admit that they know Microsoft is working on the development of the successor to the Xbox 360, it is difficult to believe that Microsoft would want to announce as soon as E3 2012 while it does appear that the 360 still has a lot of life left in it. Although with the announcement of the Wii U, it could be that Microsoft’s timeline is unchanged and the need for a next generation announcement next year is necessary.

If the E3 announcement pans out to be true, we suspect that a 2013 availability of the console is in the cards, but some say that Microsoft will roll the console out for the 2012 holiday season. We believe this to be doubtful, as we suspect Microsoft will want to have a strong holiday season before moving to the next console. In any event, we will just have to wait and see; and don’t expect Microsoft to be forthcoming with any clues as to their next console strategy.