Microsoft mentions a cheaper Xbox 360 console based on Xbox Live Arcade.
Microsoft has confirmed to the Financial Times the existence of the rumored Xbox 360 Arcade system. The article revealed that the $279 unit will include a wireless controller and pack in at least three Xbox Live Arcade games: Pac-Man, Uno and Luxor 2. Online rumors are claiming the included game disc will release with five arcade games in total, including Boom-Boom Rocket, Feeding Frenzy and potentially Pac-Man: Championship Edition in place of classic Pac-Man. This news coincides with Sony's announcement to release a 40 GB PlayStation 3.
Microsoft's president of the Entertainment and Devices division, Robbie Bach, said, "Arcade becomes [for us] the ability to bring in a new set of audiences. They're probably a little bit more casually focused, they're looking for a new family experience, or they're more price focused."