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dbot said:

SOME EXPERT GAMING SITES: The $199 Arcade is being sold at a loss ($239 to build) because it is going to be discontinued in response from game designers who don’t like being limited with the lack of a hard drive and a higher rate of customer dissatisfaction.

 

 Can you provide a link to the $239 to build article?

I think the $199 arcade will hurt the PS2 the most.  It may force Sony to drop it to $99.  I don't think it will impact the Wii at all.  It should help Microsoft move some more 360's, but if it doesn't work they are in trouble.

I'm giving you a link to a site that claims an even higher cost but has a much more thorough and thoughtful discussion on the topic. It's a very good read IMO.

http://gamer.blorge.com/2008/08/03/proof-of-xbox-360-arcade-price-drop-to-199-being-discontinued/

 ( I can dig up the other again if you need but I went through about nine google pages.)