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Microsoft working on cheaper slim 360

To replace Xbox 360 Arcade unit.

Microsoft has said that it is working on a second version of the new slim Xbox 360 that can be sold at a lower price point.

The new Xbox 360 was unveiled last night and will cost £199 / €249 when it launches in Europe on 16th July.

As well as a new design, it sports a removable internal 250GB hard disk as standard, and has integrated 80.211n Wi-Fi.

According to GameSpot, both the existing Xbox 360 Elite and Xbox 360 Arcade models will be reduced in price by $50 in the US, where the new 360 launches this week. The old models will then be discontinued once stock is cleared.

More intriguingly, Microsoft said that a second Xbox 360 in the new form factor would be put together to replace the lower-price Arcade SKU, which currently retails for $200 (now $150) in the US and £159 / €199 in Europe.

There's no immediate word on corresponding plans for Europe - either for a clearance price cut or a second model - but we're inquiring.