Last week, Microsoft closed a deal with Israeli manufacturer M-Systems to provide flash memory discs for the successor to the Xbox, commonly referred to as the Xbox Next. Ever since, speculation has run rife that the software behemoth would eliminate hard drives from its next-generation console to increase its profit margins.

Today, a businessman involved with the Xbox Next added fuel to the rumor fire. Speaking to the Israeli business site Globes Online, M-Systems CEO Dov Moran said that Microsoft has indeed decided not to include a hard drive in the Xbox Next's specs. "Microsoft has taken the hard disc out of its Xbox," he said. Moran went on to say, "The only thing left will be a CD," which presumably means a CD/DVD drive.

Moran indicated that in the hard drive's place would be one of his company's flash memory discs, which range from 16MB for civilian use to the whopping 47GB military variety. "At some point, when users want to save their e-mail messages, copy music, or anything like that, the only storage they’ll have is what we give them," said the CEO.

When contacted by GameSpot, Xbox Group Product Manager David Hufford said Moran was "talking way over his head." He continued, "Mr. Moran is aimlessly speculating, and we never comment on speculation. We've made no such announcements about future Xbox products and services and we don't intend to for quite a while. Until we do, we suggest people take guesswork for what it is."

However, if Moran's statements are true, the Xbox Next will likely not be backwards compatible, since it would be almost impossible for it to emulate how some games dump data onto the Xbox's hard drive.