MS has stated recently that they lose money on Arcades, but make up the difference with the first accessory sold. That would put the cost of the Arcade models just a bit over $200, to MS.
The HDD accessories are ludicrously profitable. If you were MS, would you:
(A) Cut the price of the Arcade to $149.99 and the Elite to $249.99, making the arcade cheaper than a PSP-3000 or a DSi, and increasing your losses / unit by a raw $50 / unit, especially if the Arcade is popular, or...
(B) Just cut the price of the Elite to $249.99, decreasing your profit margins, but being $50 cheaper than the PS3 slim, losing $50/unit just on sales that may have otherwise gone to the competition. ...and not looking like your hardware is old/cheap enough to be sold under the price of a handheld like the DSi?
IMO, the Arcade model may get bundles, but it will NOT get cheaper for at least another year.. and it'll get priced at $179.99 or somesuch, not $149.99. The number of cost reductions remaining, with hardware, in the unit are nearly tapped. Some items, like the DVD drive, case, etc. just aren't going to get cheaper. Only the CPU/GPU will, and not by a landslide. The HDD on the elite is one of the most profitable accessories, and thus, its also the most likely place to receive a cut for reasons of competition.
