Rumor: $199 Xbox 360 Arcade with motion controller

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Building on reports of an impending Xbox 360 price cut, which allegedly will drop the Arcade SKU below Wii to $199, comes the reemergence of Microsoft's elusive motion controller, now rumored to be included with the Xbox 360 Arcade this holiday. A source "close to Microsoft's marketing department" detailed the bundle to X3F, claiming the new Arcade system will feature a 512MB memory card (in place of a hard drive), the New Xbox Experience pre-loaded and a motion controller, along with a few compatible minigames developed by Rare.

The motion controller supposedly will be sold separately as well, in a package that includes even more minigames. The controller is said to be compatible with all versions of Xbox 360. So how 'bout it, Nintendo -- you gonna trump this by tacking on HD?

This article was originally published on Joystiq.