As E3 draws closer and a potential reveal for the next Xbox seeming more real every day, the rumor mill is starting to kick up big time. Let’s recap – the next Xbox is rumored to have a better Kinect with finger tracking and a Wii U-like tablet controller. The newest rumor is the most legitimate and if true would be the biggest change to console gaming since the change to CD-ROMs in the 90s.

MCV got the exclusive scoop from their inside sources that the next Xbox is not going to have a disc drive. What adds further credence to this story is that MCV’s sources say that they are under “the strictest NDA” in regards to this news.

Let’s get the bigger news out of the way first though – the launch date. These sources claim that the next Xbox is set to launch in 2013 which puts it right where previous rumors have pegged its release at. This will put it one year after the Wii U and who knows how many years before the next PlayStation.

For those worried that this digital discless future would leave out those without Internet connections, worry not. The rumors state that games will be able to be stored on “interchangeable solid-state card storage.” MCV says that they don’t know if that means a proprietary format or a universal format like SD, but come on, it’s Microsoft. If we’ve learned anything from the past two generations, it’s that Microsoft creates proprietary technology like the current hard drive in the Xbox 360 to drive up prices for hardware. Sony does the same thing with their proprietary memory card format in the PlayStation Vita.

Moving to a discless console would have an impact on the market as well, no? MCV rightly points out that this would have a huge impact on the retail sector. They thrive off of being able to offer disc-based games that can be traded in and resold for 50 to 100 percent more profit while pocketing all the cash. Moving to digital only formats would remove the retailers out of the picture which is in line with what previous rumors were saying about the next Xbox having something in place to prevent used games.

We have to look at the bigger picture, however, to see how this would affect game consoles. With the Wii U launching this year, it will most definitely be using disc-based storage. With Sony launching the PlayStation 4 at some point in the future, it’s a given that they would be still pushing blu-ray since the PS3 has been so integral in pushing that format.

If Microsoft heads towards a discless future, it would put itself into a position to be future proof. Now, there may be hardware changes in the distant future that require even more horsepower, but who’s to say that Microsoft wouldn’t implement an OnLive service on the next Xbox that would offset the need for new hardware.

As we move towards streaming full games and the adoption of digital trends like this, new hardware updates every five to six years will be a thing of the past. There will be resistance from people who prefer to have physical formats over their games being saved on the cloud, like myself, but progress is never ending, especially in the gaming industry.

What do you think? Would you like to see a discless Xbox 360? Or do you think this is the wrong move at this point in time? Let us know in the comments.