The £199.99, family-focused, hard disk-free, Xbox 360 Arcade is set to fall this month to (or below) Wii pricing at £179.99 or cheaper if differing reports are to be believed.

It is also possible that the £299.99 Elite will drop to around £240; the Premium will slip from £249.99 to the £200 mark.

News of the initial Arcade price chop came from MCV, which quotes the following, "One trade source told MCV: 'A few publishers have confirmed the news to us, and we’re aware of some price movement is coming. The major chain retailers have all been told.'"

Another report via TechRadar has it that a 50-euro price cut across all Xbox SKUs is on the cards.

Microsoft is not currently commenting on "rumour and speculation".

At the moment all of this news is based on off-the-record quotes. However, when Microsoft launched the Arcade bundle in October last year in the UK it was clear that not only does it have the financial muscle but also the will to compete head-on with Nintendo's market-owing Wii.

These rumoured slashes also signal the build-up of more rumours concerning the next stage in Xbox hardware (the legendary Xbox 720). This is especially following 8bitjoystick's report of the Jasper, Opus and Valhalla motherboards for Xbox. These designs gave rise to opinions/rumours/speculation including:

1) Imminent internal Blu-ray drive.
2) Xbox Live Console with no internal storage.
3) Xbox Live Console with 500Gb internal hard drive.
4) Xbox 3 (720 etc) due in 2010.
5) Xbox 3 (720 etc) due in 2011.

So, place your bets in the Forum now...