In addition, the current $299 60GB model will be reduced to $249. Microsoft's press release, however, notes "while supplies last." Based on that, it sounds as though eventually, the only two Xbox 360 models at retail will be the 120GB version and the $199 Arcade model, which comes without a hard drive.
This price drop, along with the new PS3 price, will place pressure on Nintendo to drop the price of its aging Nintendo Wii console. While the Wii's definitely redefined gaming with its innovative controls, Microsoft is quick to point out that the Xbox 360 you buy this year will be compatible with the controller-less "Project Natal."
Nintendo's Wii has never been a technological powerhouse, and with these other consoles dropping close to its MSRP of $249, there are going to be some market share changes, most likely. Of course, as I said, the innovative Wiimote has made video gaming fun again, but Project Natal will eliminate that advantage.
Naturally, Microsoft didn't indicate the price cut was anything but a cut for the upcoming holiday season, not mentioning the PS3's price cut. Shane Kim, corporate vice-president of strategy and business development for the Interactive Entertainment Business at Microsoft said:
"With the holiday season right around the corner, it's already time to start looking for entertainment and gifts that everyone will enjoy. If you're looking for deep experiences that don't require deep pockets, now is the time to purchase an Xbox 360. We've got the best games, a vast library of TV shows and movies, new music experiences, more ways to connect friends and family, and so much more on the horizon including 'Project Natal' - no controller required."