As if all the images and videos weren't enough evidence, we've now received official confirmation from Microsoft that new Xbox 360 Arcade units do come with 256MB of internal storage. Speaking with us, a Microsoft spokesperson said quite simply, "We are constantly updating the console's more than 1700 internal components. We can confirm that we are moving to internal memory for the Xbox 360 Arcade. The physical internal memory is the same size as the previous external memory units - 256MB."
So there you have it kids, the Xbox 360 Arcade now has internal memory instead of an external Memory Unit. That means you can save games and download content right out of the box, but if you want to take it anywhere, you'll need to pick up a Memory Unit like everyone else.