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http://www.beyond3d.com/content/news/396

 

However, the most likely possibility is the introduction of a cheaper version of the Core. Microsoft's Shane Kim has said that the Core will not be discontinued and that the 360 must reach $199 in order to penetrate the mass market. What this means is that the Core in its current form will probably be phased out and replaced by a new, fully 65nm Core model that costs Microsoft much less to manufacture. That version of the Core will then become Microsoft's entry into the $199 market.

 

Hmm, definitly seems like it is true. This could be a good move for ms.