Microsoft officially confirmed the 360 Arcade console. It will be priced at $279. The main intention of Microsoft here is to compete with Nintendo’s popular $249 Wii.

The console will include a wireless controller, and pack in at least three Xbox Live Arcade games: Pac-Man, Uno, and Luxor 2. There are possibilities of inclusion of other games as well. Mostly Boom-Boom Rocket and Feeding Frenzy will also be included.
Looking at this move from Micorsoft, Sony announced that it has dropped the price of its 80GB PlayStation 3 SKU in North America to $499.
[Via-Gamespot]
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