In an effort to keep outdoing Nintendo, Microsoft has begun offering 20GB HDDs or free 512MB memory cards for the $200 XBOX Arcade owners. With this deal you should be able to get an XBOX 360 console complete with a 20GB HDD for only $220, still $30 less than the Nintendo Wii. This is also an effort to get all XBOX 360 users ready for the upcoming updates, or the new “XBOX Experience” as they have labeled it, many of which will require the extra hard drive space that the arcade version does not have.

The Details: To sign up for the deal you must go to the official site and sign up by entering your console’s serial code and your information. You will then be able to purchase a refurbished 20GB HDD for only $20, or claim your free 512MB memory card.

This last weekend the XBOX 360 saw a 32% increase in sales in the United Kingdom thanks to Microsoft’s latest price drop. Meanwhile, the Playstation 3 saw a 8% decrease in sales during the same period. This is what UK retail monitor, GfK Chart-Track, reported.

The Nintendo Wii sales also went up, but by a measly 3%, when compared to the XBOX 360. Microsoft’s second price cut seems to have spurred the second surge of XBOX 360 sales world wide. Earlier this week, XBOX 360 units in Europe broke 6 million. Japan has also seen a boost in XBOX 360 sales, where the console is constantly being reported as sold out.

After the recent price cuts on the XBOX 360 console, it seems Microsoft is starting to cut the prices on some of the accessories. Today, Microsoft cut the price of the 120GB HDD for the XBOX 360 by $30, putting it at $149.

This price change is already effective at large vendors like Amazon and EBGames.

New rumors of the XBOX 360 Arcade Price Drop have emerged. According to someone “close to Microsoft’s marketing department” the Arcade system will cost $199 and will ship with a motion controller.

The arcade system will come with the console, a 512mb memory card, the motion controlled controller, and motion controlled arcade mini-games. The console is expected to ship Holiday 2008. Another attempt by Microsoft to compete with the Wii for casual gamers. Albeit Microsoft’s interest in casual gamers seems sudden, they have had their eye on them for a few years.
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There have been several rumors about a potential price drop for the xbox 360 arcade system.. who really cares? The xbox 360 arcade version is just a glorified coin-slot operated arcade machine — who is going to spend $200 on a next-gen console that comes with Pac-man and Uno? I know I’m not. Not to mention it still not that great of a deal: the xbox 360 arcade system only comes with a 256mb HDD, whereas the pro version comes with a 60GB HDD. Buying that HDD separately will cost you $99. The arcade version also lacks backwards compatibility with the original xbox (unless you drop $99 for the HDD), a headset, and networking cables.

It’s a step in the right direction, but the arcade system is pretty much worthless to any self-respecting gamer.

@Microsoft: Want to compete with the PS2 and Wii? Drop the cost of all versions of the xbox 360 by at least $50 (or more in the Arcade version’s case) and then we’ll talk.