You can play games on a 360 without a hard drive, but when you look at what you get for your money, who would?
the arcade is far less then a 360 with a HD. With the HD, you can cache games, download demoes, movies, tv, netflix, download games that are not available outside of XBL.
The value you get for $299, is far better then then value you get for $199. This is why the arcade does not sell well, and why it still won't sell well.
The 360's real price point, is $299.







