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iSuppli teardown of the 20gb 360 in Nov 2006 was $323. Costs for the 360 are reducing at something in the region of 10% a quarter and the 65 micro processor should save $50 over the old processor.

$1 billon charge to fix 10 million Xbox "red ring of death" equates to about $100 per console.

So, if the 65 micron processor cures the overheating warranty problem, then Microsoft should save be able to make a small profit on the Falcon Premium if priced at $200.

So a pre-Xmas price cut would be in order to tempt some of those 10 million original Xbox owners who have not upgraded to get Halo.