You can get a refurbished one at Buy.com for $199

@ everyone - I picked this over half a year ago so im full of win if this is true. I've felt for a long time that they were going to do a hardware update now.

@ cost - yea its only a couple of dollars to increase HDD space and add wireless. Probably $10 at the max and they'd make half that back from online services/movie downloads at least.

@ elite - With the only justification of its existance is thru blu ray. It'll become the media centre SKU and compete directly with the PS3.

The only question now - what do they do with the Arcade and will they add wireless?

Agreed. The only reason why anyone buys it is because you have to shell out $180 for the bigger HDD if you max out your 20 gig. (and the Elite is $100 more than the Premium) Imho, the Elite = total fail. Unless they do something like release a model with a BD drive, a 60 GB Premium would make the Elite worthless. (For example: I have ~10GB of stuff on my PS3. That's not a big deal to me because I still have more than 45GB left and I wouldn't really need to go to 120GB. But if I only had 20GB total, I'd have like 7GB left and I;d be getting worried...)

I don't know if it is indicitive of dropping the price for good or a fire sale, but the 20GB drives could literally be more expensive than 60GB drives. The reason is that platter density is high enough that a single platter may hold 60GB even in laptop drives now (I could be wrong).

If manufacturers stopped making 20GB drives except for the Xbox 360, it would be an extra expense to do so and the manufacturer could give MS a better deal on 60GB drives than 20GB drives.

As far as I can tell, the primary reason people buy the elite is because they don't know any better.  They don't know the feature set comparisons, don't understand them, don't care.  They want the best possible Xbox and don't realize it's the same as the Arcade except the paint job and the hard drive.

And it makes a huge profit for Microsoft.

Looks like the price drop is possible.

kotaku has reported on on an ad found in the Sydney morning herald which has 360(pro) @ $450 ... that's a $130 price drop and would (FINALLY !) put Aussie prices back to being just above European prices for 360...

As such M$ would also be in a position to cut US prices ... especially if their is any reason to believe the 60gb rumors...

I don't trust arstechnica.com since this they're the source of other recent rumors that have been proven wrong.

Now being reported on major new site(s).

MSNBC - http://www.msnbc.msn.com/id/25476764/

Microsoft needs to integrate Wifi into the box, make it a slimline model, and price-reduce it to $279 or so. That will be full of win and will be a platform the can ride out to the end of the generation. They can certainly get there with die shrinks, combined chips, reduced power consumption, etc. The technology is now 3 years in the market and certainly should be a lot cheaper than it is now.

I post about 6 months ago that my local Fred Myer has put all 20GB HDD on clearance (and they no longer carry them, only 120GB). I have a feeling then that they are doing away with 20GB.

I hope MS would just eat their words and put 20gb in the next "Arcade" sku, and may be release remaining stock of 20GB for cheap so the HDD-less people (yes all three of them) can get them.

20GB , 60GB and 120GB I think would be good ... may be price at 249, 299 and 399 this coming fall ?