Rumors can be strange and wonderful things, but rarely ever both. The new Xbox 720 rumors fall under both categories.

Kotaku is reporting that their sources have told them that the next Xbox, dubbed the 720 for obvious reasons, is updating everything about the console for a release in 2013.

The sources are claiming first and foremost that the next Xbox will do away with the DVD format opting for Sony’s industry standard Blu-ray format. A Blu-ray disc can hold either 25 or 50 GB and easily best the DVD’s paltry 9 GB.

The sources also claim that the next Xbox will ship with an improved Kinect sensor that would further Microsoft’s plans of having Kinect invade every living room around the world. They say that the new Kinect would feature an on-board processor, a feature cute from the original Kinect. This would allow the Kinect to detect motion more effectively while freeing up the resources of the actual console to do the heavy lifting when it comes to games.

The most interesting rumor to come out all of this though is the potential for Microsoft to equip the console with some kind of software that would prevent the playing of used games. This could either be done through tying each game to a person’s account or through something hardware related. It’s too early to tell and don’t take it as fact just yet. A move like that would be drastic and anger a large portion of the gaming community who rely on stores like GameStop to obtain cheap used copies of games.

Reports from IGN also indicate that Microsoft will be using AMD’s Radeon 6000 series of graphics cards to power their console. This would put the next Xbox at about six to eight times more powerful than the current Xbox 360 and two times more powerful than Nintendo’s Wii U console expected to launch later this year.

Fudzilla is also reporting that the CPU for the Xbox 720’s development kits are already going into production for a late 2013 release. Those within the industry are saying that Microsoft is on track to deliver Xbox 720 dev kits to developers as early as March of this year.

As with all rumors, especially the anti-used game system, take them with a grain of salt. If any of this is true, we should hear more about it in the months leading up to E3 in June.