Xbox 360 E console review: New Xbox 360 brings nothing new to table

The good: The Xbox 360 E delivers a fantastic library of media and games, along with slightly quieter operation than the previous 360 model.

The bad: The 360 E loses the optical audio output found on previous Xbox models; lacks a Blu-ray drive; requires annual Xbox Live Gold subscription for nearly all online gaming and entertainment apps; older 360 hardware/software bundles remain a better value. The newer Xbox One is just around the corner.

The bottom line: The Xbox 360 remains a great video and gaming console, but fans will be better served by older 360 bundles -- or waiting for the Xbox One.

Last time Microsoft updated the Xbox 360, it was 2010. The so-called Xbox 360 S added some much-needed upgrades to the 360, including built-in Wi-Fi, a larger hard drive, and a smaller chassis. More importantly, the 360 S was quieter, and incorporated a new hardware design that eliminated the notorious "Red Ring of Death" overheating issue that afflicted the 360 since it was first introduced in 2005.
For 2013, Microsoft has introduced another version of the 360, known as the Xbox 360 E. But with its successor, the Xbox One, hitting stores in November -- along with its arch-rival, the PlayStation 4 -- is there any reason to sink $300 into a new 360? And even if you do set your sights on the 360, is the latest model the biggest bang for your buck? I spent some time with the 360 E, and here's what I found out.
The new 360 vs. the previous 360
A bit smaller than 2010’s Xbox 360 S (I'm talking millimeters here), there's really only a few aesthetic changes to the design of the 360 E. For starters, it's designed to fall in line with stylings of the Xbox 360's incoming successor, Xbox One. The 360 E shares a similar glossy and matte mashup with angled grilles on top and on either side for venting.

                                            Three iterations of the Xbox 360.

On the back panel, the all-important HDMI connection is still there, but there's no longer a multi-AV out port. Instead, what's left is a jack for a 1/8-inch breakout AV cable. A cable for a composite connection (yellow video plus red/white stereo audio) comes in the box, but you'll need to find a component one for HD. The good news is that the cables are no longer proprietary. The bad news? Still, to this day, you cannot play Xbox 360 in HD right out of the box without supplying your own cables.
Microsoft has eliminated some of the versatile connection interfaces that were present on the 360 S -- which is actually kind of a bummer. Gone is the dedicated optical audio-out found on earlier 360 models. That means the only way to get surround sound is through the HDMI connection. If you're like me and have a slightly older AV receiver that can't accept audio over HDMI, you might be in trouble.

                                          There's less to love around back.

If this wasn't enough, the Xbox 360 E actually removes a USB port as well. You're probably not going to feel the impact of only having a total of four ports (two in the front, two in the back) as opposed to five, but when you're paying the same price as a 360 S, one would assume that all the parts would be kept intact.
Another slight difference: the touch power and eject controls from the 360 S have been replaced with more-traditional physical buttons.
There are, however, a few things that survived the trip from S to E. The 360 E maintains the elusive infrared port (so, unlike the IR-less PS3, you can still use standard remote controls) and a replaceable hard drive (you'll still need to use the proprietary Microsoft model, not just a standard laptop HDD).

                         Everything included in the Xbox 360 E box.

What else is different? Not a whole lot. The 360 E can stand horizontally or vertically. The power slot is differently shaped, but the inline power brick from the S is still present. Ethernet and Wi-Fi are still onboard for online connectivity, and the dedicated Kinect port remains.
Microsoft debuted the E console saying it would run quieter and cooler. During my few weeks with it I did notice those two things to be true, but nowhere near the dramatic improvement going from a "classic" white 360 (the 2005 version) to the 360 S (2010 version). If temperature and noise are your two biggest reasons for seeking an upgrade, allow me to talk you out of it.
Gaming and entertainment options
The Xbox 360 is the top-selling game console of this generation with good reason. The game library is top-notch, with all of the top third-party games you'll also find on PS3 (Madden, Call of Duty, Grand Theft Auto, Assassin's Creed, BioShock, Batman: Arkham Asylum, and so forth), plus a handful of key Xbox exclusives, such as the Halo, Gears of War, and the Forza series, as well as the upcoming Titanfall. There’s also a great selection of smaller downloadable indie titles on Xbox Live Arcade.

The Xbox 360 can still only play DVDs and CDs -- Blu-ray movies won't work, as they will on a PS3, and the upcoming PS4 and Xbox One.
Both the PS3 and Xbox offer online multiplayer games, but Xbox Live is arguably a larger, more engaged community. The catch is that in order to play online, you need to upgrade to the Xbox Live Gold plan, which costs $60 per year (though you can often find deals for closer to $40).
Annoyingly, the Gold plan is also required to access any of the Xbox entertainment apps. That’s unfortunate, because Xbox arguably offers some of the best selection of nongaming apps out there, including Netflix, Hulu Plus, Amazon Instant, ESPN, Fox Now, Crackle, YouTube, and Vudu. (Full disclosure: there are also apps for CNET and many of its sister CBS Interactive properties, including GameSpot and Last.fm). In other words, you need to pay the annual "Xbox Live tax" to access any of those services through the 360, including otherwise free ones like Crackle and YouTube. Keep in mind that you can get many of those services at no extra charge on a PS3, Apple TV, Roku, or Chromecast. Indeed, a Chromecast ($35) or Roku LT ($50) can be yours for less than the annual Xbox Live Gold subscription fee.
The Xbox One, so far as we know, will also require Xbox Live Gold for online gaming and entertainment apps as well. The Sony PS4 will require a similar PlayStation Plus subscription for multiplayer online gaming, but PS Plus will not be required to access entertainment apps like Netflix. (Currently, the PS3 requires no extra fees for online gaming.)
Bottom line: if you want to do anything fun on the 360 beyond playing single-player games, you'll want to budget the annual Xbox Live Gold subscription into your plans -- or plan on getting one of those alternatives instead.
The current competitive landscape: 360 E vs. 360 S vs. PS3
Like the 360 S before it, the 360 E comes in a variety of flavors, too: there’s a 4GB version ($199), a 4GB unit bundled with Kinect ($299), and the 250GB version (without Kinect) for $299. Since you're going to need a healthy amount of storage for all of the downloadable goodies owning an Xbox 360 has to offer, I really can’t recommend either of the 4GB versions.
As for the 250GB version of the 360 E -- that’s tough to recommend, too. Consider that some teardowns of the console show that the 360 E is a less expensive system to manufacture, but those savings have not in any way been passed along to the customer. The 360 E will cost you the same $299 that its predecessor did -- despite offering one fewer USB port and no optical output.
In the meantime, the earlier 360 S model -- which has that extra USB and optical digital audio port -- is available for the same price or less, sometimes with far more attractive bundles. For instance, the Spring Value Bundle packs in Darksiders II and Batman: Arkham City for the same price of a new (gameless) 360 E. For an Xbox 360 newbie, it's kind of a no-brainer.
Meanwhile, the PlayStation 3 -- which, again, offers the Blu-ray capability that the Xbox 360 lacks -- is available for $270 to $300, in various bundles with great games like God of War: Ascension, Uncharted 3, Assassin's Creed III, and (in September) Grand Theft Auto V, with hard-drive capacities up to 500GB.

Buy the new 360, stick with the old one, or wait for next-gen consoles?
Yes, the 360 is nearing the end of its life cycle, but there are plenty of new titles planned for the platform from now deep into 2014. Likewise, it's important to note that the Xbox One will not be able to play Xbox 360 games; it'll take years for the Xbox One's gaming library to eclipse that of the Xbox 360's.
Of course, it’s the impending November release of the Xbox One that’s the elephant in the room. Do you get a $300 Xbox 360 now, or put that money toward the $500 purchase price of the Xbox One -- or the $400 PS4? If you've waited this long without buying an Xbox 360, it's probably wise to wait until the Xbox One and PS4 are released to see if they pique your interest. Judging from what I've seen and played so far, next-gen gaming will deliver the graphics and eye candy in the short term, but will take a while to really mature into platforms that significantly distance themselves from what is currently available.