We’ve known for quite some time that Microsoft was preparing to drop the prices of their various Xbox 360 consoles and now it has happened (although only in the U.S.). This comes at a convenient time shortly before the start of the holiday season, and they’ve managed to get the price down to the “sweet spot” for gaming consoles. The sweet spot is under $199 which is what their Arcade version will be selling for.

With the drop in price, we immediately thought of the fact that the Xbox 360 can be used as a media center extender. After looking at other media center extenders available, the Xbox 360 Arcade version is now one of the most affordable options for those who want to extend the capability of their Media Center PC’s. Some of the most popular options like the Linksys DMA2100 or the D-Link DSM-750 both cost around $250 while the HP x280n MediaSmart Connect will run about $350. While the Arcade version of the Xbox 360 doesn’t come with a hard drive (neither does the Wii), it is still a great value at the new price of $199.

The complete line-up of pricing for the Xbox 360 is:

  • Xbox 360 Arcade – $199.99
  • Xbox 360 – $299.99
  • Xbox 360 Elite – $399.99

Microsoft now offers the most affordable gaming console on the market, even cheaper than the Wii. Could this possibly mean that Nintendo will consider dropping the price of the Wii before the holiday season and their two-year anniversary? We’re doubtful because even today, some people are still having a hard time getting their hands on one.

So, what do you think? Is the Xbox 360 Arcade version a great bargain at $199.99 even though it comes with no hard drive?