Be gone, red ring of death. A recent report suggests that cooler-running 65nm chips for the Xbox 360 are already in production. It could spell an end to the popular gaming console's overheating problems.

According to the Inquirer website, 65nm versions of both the 360's Xenon main processor and Xenos graphics chip are currently being cranked out of Far Eastern production facilities. The implication is that the long-awaited 65nm revision of the Xbox 360 could arrive any day now.

To date, all Xbox 360s sold by Microsoft have been powered by processors and graphics chips based on 90nm production technology. Unfortunately, the console has suffered widely-publicised overheating problems. Typically, this manifests in the form of a hardware failure and a red warning light popularly known as the "red ring of death".

The hardware failures have hit Microsoft hard. In a move designed to placate customers and boost confidence, Microsoft was recently forced to offer an extended three-year warranty for all 360s. The decision contributed to a multi-billion dollar loss for Microsoft's gaming division in its most recent financial year results.

65nm Xbox 360s

Still, as well as offering improved reliability and cooler operating temperature, 65nm Xbox 360s will deliver further benefits.

It's thought the main chassis will be a dead ringer for the current console. However, the reduced power consumption of the new chips will allow a smaller, lower-rated power supply unit (PSU). Existing 360s are fed by an enormous 200W external power brick.

For Microsoft, the smaller, cheaper chips will also help improve manufacturing yields and reduce costs.