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According to various websites, non-disclosure agreements are now in place with various retailers in Europe for a price cut across all Xbox 360 SKUs.  It's expected that the price cut will amount to around €50 which will place the Arcade SKU below the price of Nintendo's Wii.  The price cut is expected to happen before Easter.

Retailers that have been contacted by GamesIndustry.biz (the source for this posting) have refused to confirm or deny the price drop.

source: http://www.gamesindustry.biz/content_page.php?aid=33808