Microsoft Corp. (MSFT) will release the next version of its Xbox video-game machine, the top-selling console, in time for the holidays next year, according to people familiar with the company's plans.

The new device is planned for Thanksgiving and Christmas sales, said the people, who declined to be identified because the product road map is confidential. The software maker hasn't decided whether to unveil the new Xbox at an industry event such as the E3 show in June, or a separate event devoted solely to the machine, one of the people said.