The rumor about the 60GB Xbox 360 was on the mark. Starting this August, North America will see another Xbox 360 SKU in stores, a 60GB Xbox 360 for $349. That's the same price as the current 20 GB Xbox 360 package, which will drop $50 to $299 until the remaining inventory is cleared out. Microsoft has no plans to apply the $50 discount to the Xbox 360 Elite or the Xbox Live Arcade model. Now the $20 cheaper, hard drive-less Xbox Live Arcade model looks like an even worse deal compared to the discontinued 20 GB Xbox 360. No plans were announced for other regions, but I wouldn't expect Microsoft to keep producing 20 GB Xbox 360 for the rest of the world.
Images courtesy of Microsoft.