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New entry-level Xbox 360 model imminent?

Hot on the heels of a new PlayStation 3, all signs point to Microsoft revamping its entry-level Xbox 360.

Xbox 360 Arcade box
From rumor to reality: the Xbox 360 Arcade

Now that the long-rumored "bargain" PS3 now a reality (in Europe, anyway), how will Microsoft respond? Over the past few months, the company has refreshed the bulk of the 360 line: the $450 Elite debuted in April with a large 120GB hard drive, HDMI port, and (finally!) black color scheme; the Pro (a.k.a. "Premium") 20GB model got a $50 price cut and HDMI upgrade; and there's even a limited-run $400 Halo Edition (basically, the Pro with a military camo paint job) for $400. But what of the lowly Xbox 360 Core System? The price on that model was dropped to $280 in August, but the hard-to-recommend system (it lacks the wireless controller, headset, hard drive, and HDMI output found on all the models listed above) appeared to be on the fast track to "end-of-life" status.

Or perhaps it was all just a clever ruse to clear the path for yet another Xbox. Recent weeks have seen a flurry of rumors that the Core is about to be replaced by something called the Xbox 360 Arcade. For the same $280 price tag, the Arcade bundle will include a wireless controller, HDMI output, and a 256MB memory card preloaded with five Xbox Live Arcade titles (thus the new name). Unlike a lot of online rumors, this one is basically dead on. De facto confirmation came from Amazon and Toys R Us, each of which prematurely listed (and since removed) the product on its respective Web site. The facts also dovetail with insider chatter we've been hearing for several weeks: the Arcade is definitely a real product. The release date remains fluid, but October 23 seems to be the consensus.

The inclusion of the wireless controller, HDMI output, and especially the memory card (needed for saving games and engaging in most online activity) puts the Arcade bundle into the realm of consideration where the Core System never ventured. But we're still gonna have to give thumbs down on this one. In the end, the $70 extra you're paying to get the 20GB hard drive on the Pro model is money well spent. You're going to want that hard drive sooner rather than later, so you might as well get it with the console itself--and since the add-on version retails for around $100, you'll actually be saving money in the long run by splurging on the $350 Pro. Still, at just $30 more than the Nintendo Wii, the Xbox 360 Arcade is likely to entice a lot of budget-conscious gamers, even if they're goal is to do little more than play Halo 3 or the latest Madden in high-def.