Microsoft prepping new Xbox 360 controller with improved D-pad for the holidays [update]

We've got it on good authority that sometime this Holiday season, Microsoft will launch a new Xbox 360 controller with a rather unique D-pad. According to our trusted source, when one rotates the D-pad ninety degrees on this new controller, it'll raise up about a quarter of an inch -- a modification apparently revealed to be targeted at fighting game fans.

Could it be a version of that nifty (yet ugly) European controller tie-in for Pro Evo 2009? Will it replace the new Xbox 360 S controller (pictured above)? Or will it be a separate, special controller? We've got plenty of questions and will try to dig up some more info, so stay tuned.

Update:
The new controller with a "transforming D-pad" has been announced and will be bundled with the Play & Charge Kit this November. Read the complete details here.

This article was originally published on Joystiq.