I think PS3 is perfect now. They are going to beat the Xbox. The $299 Arcade won't matter. No one should buy it. Coz all the future games will want the option for streaming from hard disk. Without that technology, the games will be hampered. Selling the Arcade is going to hurt everyone, including MS.
Only real difference could be made if the Xb360 Core unit (60 gig) got a price cut soon, then it will challenge the PS3.

It is better to die on one's feet
then live on one's knees







