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There is nothing unrealistic about this. In fact, taking a look at how LITTLE MS has done to reduce the retail price of the 360 (even at the loss of marketshare) as of late and it makes even more sense, as if this is what they've been waiting for.

Will it be big? Since the price of entry is not changing, it'll all depend on 1) how big public interest in Project Natal is during the holiday season and 2) if there is NEW reason that such a large HDD would be desired.