An interesting report out of Australia has come out stating that the Xbox 360 Arcade model is outselling all other versions of the Xbox 360.  That's right, the "tard pack" without a hard drive is out selling the Pro and Elite models.  One might think this is a sign of the coming apocalypses until you learn that the Xbox 360 Arcade model is the cheapest current generation console in Australia.  It seems the Arcade sells for $350 AUD vs the $400 AUD for a Wii.   The Pro model sells for $499 AUD so it you want to play 360 games buying the Arcade model makes sense.

Now I'm not sure if what happens in Australia will occur in Europe and North America when the September price cuts take effect.  If the price cut rumors are true the 360 Arcade model will drop to $199 that will make it the cheapest current generation console in the market (PS2 is still available for $129).  At $199 the Arcade may appeal to a whole new set of price conscious consumers.  Maybe ones that can justify buying a $199 console then eventually buying a HDD down the road if they really need one.  Microsoft has kept the Arcade model around just for this reason.  The Arcade is the good enough model that will play all the games you can get on the Pro or Elite just without the chrome DVD drive cover or the hard drive.

kotaku.com - 360-arcade-outselling-pro-in-australia