It's been in rumor territory for weeks, but it's now finally official: Microsoft is cutting the price on the Xbox 360 console, Major Nelson has confirmed. After Microsoft Japan cut the prices on Xbox 360 in the land of the rising sun, today the company announced that in the U.S. the Xbox 360 Arcade model will drop to $199 (which is $50 cheaper than Nintendo's Wii), the standard ("Pro") 60GB model will drop to $299, and the Xbox 360 Elite 120GB model will come down to $399

....The key for Microsoft is to be able to expand beyond the hardcore audience it's become known for. Microsoft wants the average consumer to understand that there's more to the 360 than Halo and Gears of War. With a new low price of $199, an overhauled dashboard and more casual games like 1 vs. 100 and Lips, Microsoft is doing its best to reach out to the Wii audience. "They're looking to get a different demographic of consumer," said McKenzie. "This is really about the casual gamer."