Xbox 360 Arcade officially launches

In the aftermath of the 40GB, $399 PlayStation 3 launch, Microsoft has put an end to weeks of rumors and speculation by officially announcing the new $279.99 Xbox 360 Arcade. The new Xbox replaces Microsoft's previous Xbox 360 Core model, and it builds upon its predecessor in several ways.

First, Microsoft has replaced the Core's wired controller with a wireless one in the Xbox 360 Arcade. The new console also comes with HDMI output, 256MB of storage space, and five arcade games: Pac-Man Championship Edition, Uno, Luxor 2, Boom Boom Rocket, and Feeding Frenzy. However, just like the Core, the Arcade lacks the 20GB hard drive found on the Xbox 360 Premium.

Microsoft says it's aiming the Xbox 360 Arcade at families in particular. As a part of this effort, the company is "significantly expanding" its library of on-demand family content including new cartoons from Nickelodeon and Warner Bros. Microsoft also plays up the new console's Family Settings functionality, which allows parents to control what their kids can play and watch. These moves suggest the Xbox 360 Arcade is largely an effort to nab sales away from Nintendo's Wii in the coming holiday season.

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