The battle for market share amongst the current generation of consoles is heating up, with the PS3 selling considerably better than it did at launch and the Wii and Xbox 360 still selling strongly. One of the biggest reasons Nintendo's console has gained such a big chunk of the market is that low price point. MS has been closing the gap in this regard and looks to go one step further with a possible price drop for the Arcade model (without a HDD) in early September. That would make the sub $200 Arcade the cheapest available console, with MS stating in the past that $199.99 is the sweet spot for console sales. Whether Microsoft will be making a profit at that price is hard to say (revisions to the console have brought production costs down, but maybe not that considerably), as is whether that price would last if introduced. Expect solid conformation closer to the date.