So what's the hottest Xbox rumor making the rounds?  It has to be the announcement that a 60GB Xbox 360 is on it's way.  What does this mean for console maker?  Will all three models start coming with a hard drive now?  I would hope that we see the Pro get the 60 GB and the Arcade get the 20GB hard drives.  Then add a little price cut on top of that for E3. 

What I fear will happen is that by adding the new 60GB HD to the mix Microsoft will not cut the price of the 360 as much as it should.  If they drop the price on all three systems by $30 then the elite would be $419, the pro would be $319 and the Arcade would be $249.  What I'm hoping to see is the Elite go down to $399, the Pro hit $299 and the Arcade with the 20GB HD hit $249.

If Microsoft threw a 20 GB HD on the Arcade and sold it for $249 that would be the equivalent of the current Premium getting a $100 price cut and being the same price as the Wii.  They in a wii mote style controller and all of a sudden you and a Wii with voice communication, online multiplayer and a manageable friends list.  Could this system effectively compete with the Wii for the casual fans?  Or will this "me too" functionality be ignored?

Source:
http://blog.seattlepi.nwsource.com/digitaljoystick/archives/140823.asp