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The first price cut come for Japan:

http://www.tradingmarkets.com/.site/news/Stock%20News/1854216/

Microsoft will lower the price of the Xbox 360's Arcade model by 8,000 yen ($73.50) to 19,800 yen, making the device the first among competing consoles to carry a price tag less than 20,000 yen, the business daily said.

That's basically just a little more expensive that some games.