While Microsoft proclaim “Xbox 360 Arcade Now from £159.99″ on xbox.com retailers are offering almost a third off of that.  At HMV you can pick one up for £109.99 with GAME coming in a couple of pence cheaper at £109.97.

A price cut like this may suggest that the system has not been selling particularly well since receiving a hike in price from £129 back in August.  The Arcade is obviously even more of an accessory-selling machine than the Elite but if you are a parent out shopping for Xmas presents an Xbox 360 for a shade over £100 is going to look like a good deal.

With the Arcade selling at £110, if you combine it with the Xbox LIVE 60GB Starter Pack which includes a 60GB HDD, obviously, and a 3 month Xbox LIVE Gold subscription plus Ethernet cable and a wired headset and retails for around £55, for £165 you have essentially got yourself what used to be the 360 Pro before that model was discontinued.

As that would still include no games though an Elite with say Forza III and Borderlands for £200 is better value if you have the extra money to spend.  If you are looking for a cheap bundle including games Argos have a deal that gets you an Arcade plus Fifa 10 and Forza III for £139.99.  Installing that second Forza disk is going to be problematic though.

Via MCV