In the flyer it says this was a "Special Purchase".  When I was at my Wal-mart yesterday they had loaded up the 360 area with all arcade versions for the sale...

Nope.  Nothing I have is modded...  I don't typically own anything long enough to spend the time to mod...

There are two things which help Wal-Mart drop prices.  1) It's all about "Loss Leaders."  Every retail company puts front page flyer items on at a loss in order to get people in the door.  They hope you buy something else on the way out in order to recoup the losses coming through the door.  Wal-Mart runs everyday loss leaders as well as special loss leaders.  Their HBA department margins are razor thin, and a lot of those items are sold at a loss.  2) In this specific case, they will ask for a deal price from MS, because it's a big feature in their anniversary flyer.  They'll buy a significant quantity, MS will give them maybe a five dollar discount per unit, and in return they will get priority in the flyer over Sony or Nintendo.  That is all.