GameStop is attempting to stimulate the sales of the Microsoft Xbox 360 Arcade system by offering a $25 Gift Card with each Xbox 360 Arcade purchased from the retailer. The tactic is similar to the move the retailer recently made on the Xbox 360 120GB Elite, which was to offer a $50 Gift Card with each unit purchased.

Nothing has really changed, according to our sources, with the Elite. We expect a new Elite bundle to be announced for release shortly. Our sources tell us, however, that a new reconfigured Arcade bundle might also likely arrive soon. It is unknown, however, exactly what the manufacturer might be doing with this Arcade bundle; but our sources seem to think the company will move to increase the value by adding a pack-in games package to allow it to better compete with the Nintendo Wii, which is also at the $199 price point.

It seems, however, that our sources are in agreement that another price cut is coming to the Xbox Arcade bundle, which will likely move the console down to $179 to $189, but it is unlikely that consumers will enjoy a drop to $149 till the holiday season.  Our sources suggest that this move by Microsoft is likely.

As for the 250GB add-on hard drive saga, the news that the 250GB model has started to be offered outside of North America is a good sign for the future availability in North America; and our sources believe that this confirms that the 250GB model will be released into the North American market soon. Whispers, however, are suggesting that Microsoft still has inventory of the 120GB hard drives left and they are still working through them, and it might take a few more weeks until this process is completed.

As for the 120GB Elite systems, our sources indicate that sales have been a bit slower than Microsoft expected on the 120GB systems.  However, it is expected that sales are likely to increase with some of the high profile titles that are coming in the next couple of weeks, including BioShock 2, which was released into North America today. High profile title releases do seem to spike console sales. Our sources still believe that Microsoft is on track to release the 250GB version of the Elite soon, but are still working their way through inventory in North America, and this process is perhaps taking a bit longer than the company would like.

The bottom line is that Microsoft will continue to try to work through existing product. It is possible that they will drop the price at some point if the product isn’t moving fast enough, but don’t count on it.  A new Elite with a 250GB hard drive is likely. A new Arcade bundle is likely, as well. The 250GB add-on hard drive will arrive at some point here in North America as inventory starts to dwindle to little or nothing.