According to the source, Microsoft will be positioning the Arcade bundle to be in direct competition with the Wii, meaning that the marketing push behind it will focus on family friendly entertainment. With family oriented games on the packaging, the Arcade console will come packaged with the traditional Arcade goodies (512MB memory card, etc.), the new Fall update pre-loaded as well as a motion controller and a few motion controlled mini games developed by Rare. That's right, a motion controller! Supposedly, the motion controller will work with all 360 consoles and will even be sold separately, bundled with an even more expansive list of mini motion controlled games. This new $199 Xbox 360 Arcade bundle is said to release Holiday 2008.
File this all under rumors'ville for now, but don't totally discredit the information. $199 Arcade's are sounding very likely and, with Microsoft's push to undercut the Wii, matching the Wii's motion controls sounds like a total possibility. We'll just have to wait and see.
[Thanks, Keyser SÃ¶ze]