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If it plays the same Xbox 360 games, then presumably the only thing MS would be stealing away from the Wii U would be the cheap seat market at a $99 price.

That said, as a consumer, I'd be more likely to spend $99 on a second Xbox 360 than $399 on a Wii U ($299 is a different ball of wax though). In Q4 2012 anyway.

For Q4 2013, the most important thing a completely redesigned $99 Xbox 360 (presumably with 4-8GB of flash, no HDD) would represent is MS' continued support of the 360 platform, even with the Xbox 3.0 either on the market or right around the corner.

And would actually be pretty big.