New $199 Xbox 360 Slim Coming This Fall?

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Recalibrating the rumor clock, Kotaku claims Microsoft will offer a $199 version of its new piano-black, slim-style Xbox 360 this fall. That's based on a marketing Q&A document that reportedly answers the question "Will you sell a $199 version of the new Xbox 360?" with a pretty unambiguous "We will offer a $199 Xbox 360 this fall."

You probably heard Microsoft was discontinuing its older $299 Elite and $199 Arcade Xbox 360s, and that it was fire-selling them for $249 and $149 respectively.

But even at $299 with integrated WiFi and a 250GB hard drive, the entry-level Xbox 360 asks newcomers for a lot of upfront cash--especially potential casual-grade Kinect players, who'll pay upwards of $100 extra for a Kinect bundle, or $150 for the controller-free motion-sensing add-on standalone.

A $199 Arcade model employing the sleek new housing (and, presumably, lower cost internal components and design) thus makes perfect sense. Maybe it'll have a 120GB hard drive instead of 250GB. Maybe it won't include integrated WiFi. Maybe it won't have a hard drive at all.

Whatever the case, expect bundles. Lots of bundles. We're already pretty sure about a few, since GameStop posted several last week, suggesting Kinect would be $150 by itself, or $300 bundled with an Arcade model.

It looks like that Arcade model now stands revealed. Sort of. Stand by for confirmation (or an obligatory "no comment") from Microsoft.

Update: Microsoft just responded to a confirm request with this: "We will offer a $199 Xbox 360 this fall. We have no other details to share at this time."

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