Welcome to the Rumour mill, Pro-G's run-down of the big rumours currently doing the rounds in the video game industry. Every week we'll hunt down the juiciest stories and give our opinion on how legit they are. So, whether you want the ridiculous or the plausible, read on.

New Psychonauts game in the works

The Rumour: By now you should know that Double Fine is hard at work creating Brutal Legend for Sierra, but what else is the inventive developer up to? Well, the projects page on its official website shows Psychonauts hero Raz behind a "Coming Soon" banner.

Verdict: The story is plain to see, but we don't know if it's just wishful thinking on Double Fine's part - Psychonauts didn't exactly set tills on fire when it hit retail stores back in 2006. The game could also be a port of the existing game to a new format. We'd wager that the Wii is the most likely destination, but bet even more on there being no new game at all.

Plausibility rating: 1/5

Two GoWs to get sequels in 2008

The Rumour: If PlayStation and Xbox fans were to pick two series they'd want a sequel to, high on their lists would be God of War and Gears of War. These are two of the biggest names in video games right now and we'll be playing a new game for each next winter.

Verdict: Any rumour about a sequel to a huge game is always plausible as we're bound to see more games in the series at some point - we just can't be sure when. Winter 2008 seems like a reasonable bet for these two juggernauts though. Microsoft will need a triple-A title to spearhead its Christmas line-up and Sony needs to bring Kratos to the PS3 as soon as possible.

Plausibility rating: 3/5

KOTOR MMORPG in development at BioWare

The Rumour: The makers of the original Knights of the Old Republic are hard at work on a third game, and it's an MMO.

Verdict: BioWare has a studio in Austin known to be working on an MMO. Numerous staff members previously worked on the popular Star Wars: Galaxies MMO for Sony Online Entertainment and the lead designer is James Ohlen who had the same role on KOTOR. Things certainly add up, but how would this title fit in given EA's recent acquisition of BioWare? The Star Wars licence is owned by LucasArts, so would EA really let its new development studio work on a game for a rival publisher?

Plausibility rating: 2/5

HD DVD equipped Xbox 360

Hd dvd player

The Rumour: Microsoft is working with Toshiba to create an Xbox 360 equipped with an HD DVD drive.

Verdict: It's been denied numerous times in the past, but this week an anonymous Toshiba executive once again brought the subject back into the limelight. Given that the PS3 features a Blu-ray drive and Microsoft's support of the HD DVD format it seems like a logical progression to eventually release an Xbox 360 console featuring a HD DVD drive. It probably won't happen soon, but once costs come down there's no reason the new console won't hit stores - just don't expect games to make use of the new format.

Plausibility rating: 5/5

That's all until next week, but be sure to post in the comments section below if you've heard a juicy rumour.