The Arcade in the UK did go up in price. There are a few factors though, weak pound vs dollar and euro + Arcades over here are available in bundles with Batman Lego + andother game and exctra controller + 1 new release (Halo ODST, Fifa 10 etc) for £159 ($238 ish)
Obviously there is value added in there especially when the Wii with a couple of games retails @ £179
PS3 slim prcing is very competetive over here now though - £249 with 2 new releases (Uncharted, Fifa 10 etc....) Elite is £200 with 2 new releases and in some cases extra controller.
There is not enough of a differential over ps3 pricing in the UK at the moment really the Arcade needs to go £99 bare bones if they want to seriously move sales I doubt it will happen in the UK with inport and sales tax at 25% currently with 5% dealer margint he would have to land them for £70 (around 99%) cost. Not going to happen but the drop might be relaistic in the states and europe.