Sounds like the second verse from that new song by T.Roll ...

I personally don't see the slim coming just yet.  Maybe 2010.  But it could.  There are some sources out there that strongly hint that it is coming, so it may be available sooner than later.  But the 360 has NEVER had a price cut of $100 and I don't think it will.  If anything, a possible cut of $20-50 (similar to what happened in 2007) could happen.  I think that's keeping things realistic.

I think they can...

In Canada on Boxing Day (December 26th) is our big shopping moment of the year. Best Buy is carrying 40 x 360 Pro Holiday bundles per store. They are pricing them at $239.99. This may be a lost leader. But, it could be an indicator that Microsoft has more room for price reductions before they even make a slim 360.

edit:  Given how the CDN$ has sunk since the economic crisis.  A $199.99 pro is not impossible.  Other deals to on Boxing Day...  Pro at future shop for $259.99 and Elite at EB Games for $369.99

No. Why would they hold off when the Slim is going to reduce prices on the X360? A unified CPU/GPU combo will cost less to produce. Not only this, MS can upgrade 3 years worth of parts to ensure that it works smoother, and has less 'fat' which should see major cost-cutting products on it.

Because of this, a Slim model is not only going to help the 360 sell more units, it'll help MS save more money...Which is a win-win proposition, and MS is sure to release it as soon as possible.

I think they are losing a little on Arcade now, but in a year components costs should drop enough to make possible a slim model with little or no loss at all at that price, at least if they'll have 45nm main chips available, otherwise heat dissipation for current chips on a smaller case could drive costs up.
But let's not forget that given very good sales now, in a year word will be spread from disappointed users that by then will have discovered that on Arcade you have to pay extra for storage if you want to, er, store, downloadable contents, while HDD price drop will make Sony able to afford standard HDD storage at very little cost increase compared to diskless consoles, so next Xmas MS could be forced to offer it too, and on a $199 or less base price HDD cost weigh more than on a $299 one.
To make it simpler: while at $399 PS3 is considered by most too expensive, at $299, with standard mounted BD and HDD it will be perceived as good value for money, while next Xmas those extras will cost Sony a lot less than $100, so MS diskless base models would be perceived not as bad value, but nothing special given what they don't have at that lower price (while now XB360 Arcade, at $200 less is VERY good value for money).

Could they really slimline the 360? I mean, in terms of height, it can't get any thinner than the Hard drive, unless they make the next one plop it on top or something really un-aesthetic.

Horizontally, thinner could be done, but how much thinner could it really be?

Even if one were to come out, I'd be surprised if they added in Wi-Fi, or made it slot-loading, since those would easily add to the costs, and to have all this retail for 200 when the Wi-fi itself is 100 is also a dream.

A slim for 299 encompassing all that is quite likely though.

@ Stickball

I don't think we'll see an Arcade drop at all this year. They need to fix the Pro and Elite pricing first.

Pro is too much more than the Arcade for only offering a bigger hard drive. And elite is too much more expensive than the pro for only offering a bigger hard drive and HDMI cord. I think MS will fix the pricing to 200, 250, 280 or something like that. And the Arcade will probably stay 200 for a long time to come since there isn't any point in more price cuts. It's already cheaper than the Wii, what are they aiming for next? PSP pricing?

Few notes:

1) Just because the HDD is 'X' wide doesn't mean the hard drive has to be placed on the top of the 360 as it is now. What if it was placed on the side? You'd be able to slim it down quite a bit.

2) If they did that, I don't think that it'd have to un un-asethetic. Such a docking bay could look very sleek & stylish if MS wanted it to. The HDD already looks kind of slimlined as it is, so if they incorporated the HDD into a new-look system, it could look pretty decently.

3) I agree that it's unlikely they're going to add slot loading or WiFi *if* it added much costs. But at the same time - if the slim reduces cost...They could always add more value (similar to the Arcade getting the 256mb of internal memory). Wifi may be pennies on the dollar by now for a X360.

4) The Arcade will drop next year. MS has passed along price drops whenever there's been a revision on hardware that's reduced prices on their end. A $179 or $169 slim would hurt the Wii if it dropped to $199 next year, and would continue to undermine the X360.

1.  We'll see...

2.  We'll see...

3.  Didn't they add the 256 MB of Memory and take away the Memory Card? 

4.  I don't doubt it will drop, I was just more concerned with fixing the pricing of the Pro/Elite which have essentially become as useful as the Core was.

My bad I meant arcade please relax.

I would be willing to bet that a wifi chipset and necessary antennae would cost less than $10 in bulk -- perhaps even $5. The wifi being left out of the original 360 may have been a cost cutting measure but at this point it is just a profit center for MS as a wireless adapter can be had for next to nothing. I've seen wireless USB adapters in the sub $15 range...

If MS leaves WIFI out of the next 360 iteration (it will most certainly be a slim), shame on them as Sony and Nintendo both have it BUILT IN. I've had to order an expensive adapter just to get my 360 online. My Playlink is too slow and I refuse to pay MS extortion prices for their adapter when I can get a wireless bridge for $50 and use it for my HTPC and other devices as well...