This week Microsoft announced that the Xbox 360 Arcade system is available for purchase in stores. In an attempt to penetrate the casual gaming market currently ruled by the Nintendo Wii, Microsoft developed a scaled down version of the Xbox 360. The Arcade system claims fun right out of the box with five Xbox LIVE games including PAC-MAN Championship Edition and UNO.

In order to price the Xbox 360 Arcade at $280 Microsoft shaved a few bells and whistles from the standard $350 package. The 20GB hard drive is replaced with a 256MB memory card, the headset and network cable are sold separately, and perhaps the biggest flaw with this system is the lack of compatibility with older Xbox game titles.

At $250 dollars the Nintendo Wii is still the favorite among industry analysts. The game titles, innovative features, and the general fun and buzz that surround the Wii are what have attracted casual gamers thus far. However, with the holiday season right around the corner there are plenty of opportunities for both Microsoft and Nintendo to cash in.