Xbox Arcade for $199?

According to a story on Ars Technica, it is rumored that Microsoft will bring down the price of its Xbox 360 Arcade system from $279 to $199, starting Sept. 7th. A similar story on VG Chartz supplied photographic evidence of the drop.

Why should anyone care that the bottom-of-the-line Xbox 360 model could get $80 cheaper? For many gamers who are sitting on the fence about stepping into the current console generation, $199 would dangle the carrot low enough for them to bite. The September date is also far ahead of the holiday season, and the price point would be aided by Microsoft’s fall / winter lineup, with games like Rock Band 2 and Gears of War 2 releasing not too long after the supposed September date.

So tell your friends on the fence that a cheaper Xbox 360 could be in the cards fairly soon. (Fifty-dollar cuts to the 60GB Pro and 120GB Elite models are also predicted, bringing them to $299 and $399, respectively.)

The real question that remains is whether Sony will respond by bringing down the price of the PlayStation 3, or perhaps even lower the price of the PlayStation 2 to $99, which would be sure to lure many so-called “lapsed gamers.”