Microsoft,struggling in Japan, to launch cheaper Xbox:

TOKYO: US computer giant Microsoft it was launching a cheaper version of its Xbox 360 in Japan in an attempt to make inroads into the game-loving nation that has shunned the console. Microsoft will put the Xbox 360 Arcade on sale March 6 at a price of 27,800 yen (260 US dollars), less than the 34,800 yen for the current machine.

Unlike the standard Xbox 360, the Arcade version has no hard drive. It comes with games -- mostly family-friendly ones appealing to casual gamers -- with other games downloadable from the Internet. The Xbox has been a flop in Japan, home of video-game rivals Sony Corp. and Nintendo Co. which together have a stranglehold on their main market. The XBox 360 Arcade, released last year in North America, is just above the 25,000-yen price tag of Nintendo's hot-selling Wii, which includes an innovative motion-sensitive controller and aims at non-traditional gamers. Sony in October also slashed the price of its next-generation PlayStation 3 in hopes of better competing with the Wii, which was launched at nearly the same time as the PS3 in late 2006. Some 3.63 million Wii machines were sold in Japan last year, three times the 1.21 million PlayStation 3 consoles bought off the shelves.
I believe that the games will benifits most from it.